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

Special Committee on Race and Insurance Announces Charges, First Meeting

September 17, 2020 The NAIC’s newly formed Special (EX) Committee on Race and Insurance will host its first meeting on Sept. 17... Read more

Feedback Requested on Long-Term Solution for Accounting for Premium Refunds

September 17, 2020 When the Statutory Accounting Principles (E) Working Group met on July 30 during the NAIC virtual summer national meeting, it exposed for comment a request for feedback regarding the development of authoritative guidance for... Read more

Casualty Actuarial and Statistical Task Force Adopts Predictive Modeling White Paper

September 17, 2020 The NAIC Casualty Actuarial and Statistical (C) Task Force on Sept. 15 adopted unanimously by conference call its predictive modeling white paper on the property/casualty industry’s use of predictive analytics and modeling in... Read more

GCC Update: NAMIC Submits Comments on Latest Proposal; Working Group Likely to Issue Third Proposal of the Summer

September 17, 2020 Significant steps toward the development of the NAIC Group Capital Calculation have taken place over the summer, including the near finalization of the GCC template and instructions and major progress on required amendments to... Read more

Innovation and Technology Task Force Continues Work on Anti-Rebating Modernization

September 17, 2020 The NAIC Innovation and Technology Task Force continues to move forward on the revision of the NAIC Model Unfair Trade Practices Act. The goal is to modernize anti-rebating prohibitions especially to value-added services that provide for... Read more


Jonathan Rodgers
Director of Financial and Tax Policy