PADIC and NAMIC Questions Relating to Regulation File: RH01015731
- What was the scope of the investigation conducted by the CDI in support of the proposed new regulation?
- What factual and/or legal findings support the measures proposed, and what were the sources of the facts relied upon by the CDI to support this regulation?
- How were those facts, if adduced, used to develop content of the proposed rule, and how are those facts matched with the measures now proposed?
- What process was used to estimate the costs and burdens associated with the proposed regulation’s new measures? Who will bear the incremental costs and burdens associated with the proposed new regulation?
- If the added rigor of the proposed new reinsurance regulation was not the product of the factual process of development as outlined above, what are the theoretical bases of the many prescriptions incremental to the existing regulations?
- What insolvencies of California-domiciled insurers involved invalid credit for reinsurance? If insolvencies with such causation exist, for what reason was the credit on the primary company’s or companies’ books invalid?
- Was there misrepresentation at the primary company level?
- Was there a dispute between primary company and reinsurer that obviated validity, in whole or in part, of the credit carried by the primary company?
- Was the reinsurer insolvent or otherwise unable to pay?
- Were there any other reasons the credit for reinsurance carried by the primary company was invalid or not honored by the reinsurer?
- What have been the reason or reasons why any reinsurer or reinsurers have been denied admittance to do business in California? How are such non-admittances or denials of legal privilege to do business in California manifest in the proposed new regulation?
- What is the purpose of the California Department of Insurance vis-à-vis the market for reinsurance in California?
- What justifications are there for material differences between regulation of reinsurance by the State of California and regulation of reinsurance by other states? Similarly, what justification exists for material difference between the NAIC’s Credit For Reinsurance Model Law and the related Credit For Reinsurance Model Regulation?
- As related to question #9, what factual justification is there for extraterritoriality in regulation of reinsurance to be asserted by the State of California?
- Is there judged to exist any imminent event, catastrophic or otherwise, that justifies adoption of the proposed new regulation in advance of the fact-finding now under way via the NAIC’s new disclosure and attestation requirements concerning the validity of risk transfer in those reinsurance agreements effective at the end of 2005 and before--and which disclosure and attestation is embedded in the proposed new regulation?
- Understanding that the NAIC will collate and analyze such data from insurers operating throughout the United States, will the California Department of Insurance undertake its own study of such data or will it take notice of and use data collated and analyzed by the NAIC?
- Has the California Department of Insurance decided in advance of availability of broadly developed data that findings and actions of the NAIC’s relevant committees will be inadequate or otherwise deficient for the California Department of Insurance’s purposes and responsibilities? How has the California Department of Insurance shown that it can and should act in advance of the NAIC’s use of and actions based on its broader study?
- (a) Does the California Department of Insurance possess knowledge from the NAIC or from its own investigation that any reinsurer contracting with California-domiciled primary insurers is financially unable to meet obligations on such contracts or is engaged in deception? (b) Similarly, does the California Department of Insurance possess any knowledge that a reinsurer domiciled anywhere is unable to meet its potential obligations to primary insurers domiciled outside California and admitted to do business with California policyholders?
- If such knowledge exists, what is that knowledge and what has the California Department of Insurance done in response?
For further information, contact
Rick Nelson, APR
(317) 875-5250 Tel
(317) 879-8408 Fax
Posted: Tuesday, January 24, 2006 12:00:00 AM.
Modified: Tuesday, January 24, 2006 2:37:58 PM.