Creating a level playing field

US regulators are pressing ahead with a proposal to replace the current 100% collateral requirements on foreign reinsurers with a sliding scale based on financial strength. But the changes have been a long time in the making, says Lawrence H Mirel, partner at Washington-based law firm Wiley Rein & Fielding LLP and former Commissioner of Insurance, Securities and Banking for the District of Columbia. In this article Mr Mirel says while the proposal is likely to be adopted by the NAIC, it will mark only the beginning of a much longer process.

After almost a decade of often acrimonious debate, the US National Association of Insurance Commissioners (NAIC) is poised to make fundamental changes in the rules for foreign, non-admitted reinsurers operating in the US market. The new rules are likely to be adopted by the full NAIC this year, perhaps as early as March, although probably later in the year. Implementation in the states will take some time after that.