Our Positions | Receivership/Insolvency - Recovery/Resolutions Plans


The NAIC has a task force that addresses issues related to insolvency of companies, including rehabilitation of troubled companies, the liquidation/receivership process for insolvent companies and the operation of the guaranty funds that pay the claims of policyholders of insolvent companies. These issues arise both in the U.S. context and in the international standards set to address resolution and recovery of global companies that operate across borders.

More particularly the task force duties include: monitoring the effectiveness and performance of state administration of receiverships and the state guaranty fund system; coordinating cooperation and communication among regulators, receivers and guaranty funds; monitoring ongoing receiverships and reporting on such receiverships to NAIC members; developing and providing educational and training programs in the area of insurer insolvencies and insolvency guarantees to regulators, professionals and consumers; developing and monitoring relevant model laws, guidelines and products; and providing resources for regulators and professionals to promote efficient operations of receiverships and guaranty funds.

The product from this task force relates to NAMIC members especially through the costs of insolvencies members incur from guaranty fund assessments. If the practices of the receiverships managing insolvent companies are inefficient and unnecessarily costly there will be fewer assets remaining to pay policyholder claims and more will have to come from the insurance marketplace.

NAMIC Position

NAMIC follows the issues that affect companies from the criteria for deeming a company in hazardous financial condition to the attempts at rehabilitation, efforts to liquidate and the operations and costs of guaranty fund. Insolvencies in the industry affect the reputation of the entire industry so NAMIC supports a strong, effective and efficient solvency regulatory system. Also, due to our members’ ultimate obligation to pay assessments to the guaranty fund NAMIC has an even stronger interest in the continued solvency of the companies operating in the insurance market.

Our advocacy goal is to maintain basic solvency, but not to prop up poorly managed companies. Consequently, once the regulatory decision is made that a company cannot be saved, we want the receivership/liquidation process to work as efficiently as possible to preserve assets that can protect the policyholders. If adequate assets do not remain in the insolvent company to meet basic policyholder obligations, then we support an efficient guaranty fund process to protect those policyholders and pay the claims incurred under the insolvent company. Overall, the main concern must be the protection of the policyholder.

NAMIC News on the NAIC and Receivership and Insolvency

Alternative Accounting Methods Still Being Considered for Premium Refunds

May 22, 2020 The Statutory Accounting Principles (E) Working Group continues to propose and implement accounting interpretations related to COVID-19. An issue of great interest to NAMIC members relates to guidance on how to account for premium refunds issued in... Read more

NAIC Issues Business Interruption COVID-19 Data Call

May 22, 2020 The NAIC distributed a data call letter on May 11 to property/casualty insurers in 48 states, the District of Columbia, and the U.S. Virgin Islands, requesting data on business interruption coverage written in 2019 or 2020. The data call is... Read more

Next Steps Revealed on Group Capital Calculation Tool

May 22, 2020 Development around the NAIC Group Capital Calculation, a regulatory tool to be used to consider the aggregated regulatory capital held by an insurance group, took two major steps this week. First, the NAIC exposed for a 60-day comment period... Read more

Casualty Actuarial and Statistical Task Force Delays Final Exposure of Predictive Modeling White Paper

May 22, 2020 The NAIC Casualty Actuarial and Statistical (C) Task Force failed to expose for comment its expected near-final draft of a white paper on predictive analytics and modeling due to drafting errors. The task force held a previously scheduled call on... Read more

Antifraud Task Force Meets to Discuss Potential Fraud Issues Related to COVID-19

May 22, 2020 The Antifraud (D) Task Force held a call on May 20. As reflected on its agenda, the purpose was "to discuss the effects of COVID-19 as it relates to insurance fraud" and to "hear updates from state insurance departments as well as other... Read more

Contacts

Jonathan Rodgers
Director of Financial and Tax Policy

317.876.4206

  Jonathan