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ARTICLE · 24 JUNE 2021

NAIC Issues Guidance On Credit For Reinsurance

Herbert Smith Freehills Kramer LLP
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Insurers and reinsurers navigating the increasingly complex rules on reciprocity for collateral requirements should consider recent guidance from the leading U.S. standard-setting body.

United StatesInsurance
Daniel Rabinowitz
Daniel Rabinowitz
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Insurers and reinsurers navigating the increasingly complex rules on reciprocity for collateral requirements should consider recent guidance from the leading U.S. standard-setting body. On June 17, 2021, the Reinsurance Financial Analysis Working Group (ReFAWG) of the National Association of Insurance Commissioners (NAIC) issued a draft of the ReFAWG Review Process for Passporting Certified and Reciprocal Jurisdiction Reinsurers (available here). The guidance implements legal reforms occurring over the past decade intended to ease collateral requirements in reinsurance arrangements across borders. The draft is open for public comment until July 19, 2021.

The reforms addressed in the ReFAWG guidance include the 2011 amendments to the NAIC's Credit for Reinsurance Model Law (the Model Law) that allow for "certified" reinsurers and the 2019 Model Law amendments providing for "reciprocal" jurisdictions. (The 2019 amendments were intended to conform to the reinsurance

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