Insurers and investors of all stripes are having their day in the sun this summer with action on major legislation, including the streamlining of specialty and reinsurance regulations.
The House Financial Services Committee approved a bill that would apply single-state regulation and uniform standards to surplus lines–specialized risks not normally covered by standard property/casualty insurance–and reinsurance lines. The legislation, H.R. 5637, would allow these insurers to avoid running through the multiple hoops of state laws to enter into contracts with their customers, usually large commercial entities.
For example, the bill would give the ceding reinsurer’s state the sole authority to govern reinsurance contracts and would also prohibit states from applying their laws in an extraterritorial manner. It would provide uniform regulation of reinsurer solvency based upon National Association of Insurance Commissioner (NAIC) accreditation standards.