New York Leaves Life Re Attestation Rules Up In Air

The New York State Insurance Department is still deciding what life and health insurers should do about vowing for the validity of reinsurance arrangements.[@@]

The New York department has announced that it will drop its own reinsurance attestation rules once property-casualty insurers file their 2005 annual statements.

But the New York department says of the attestation rules for life and health insurers only that the rules are “under review.”

The New York department issued its own attestation rules, in Circular Letter Number 8 (2005), in response to concerns about “finite reinsurance” arrangements, or arrangements that blend traditional reinsurance of underwriting risk with transactions that are supposed to transfer economic risk.

Regulators around the country are looking to see whether the arrangements really transfer economic risk or merely help insurers adjust the numbers in their financial statements.

In March, New York Insurance Superintendent Howard Mills wrote in Circular Letter Number 8 that letter chief executive officers of all authorized New York state insurers undergoing examinations should attest, under penalty of perjury, that no separate oral or written agreements would reduce any losses associated with any reinsurance contracts.