Magazine article Risk Management

Meeting Coverage

Magazine article Risk Management

Meeting Coverage

Article excerpt

IN ORDER TO "PROVE ONCE AGAIN THAT the time-honored system of state insurance regulation is strong and growing stronger," National Association of Insurance Commissioners President William H. McCartney proudly opened the Summer National Meeting in Washington, D.C., with the presentation of the latest group of states to receive NAIC accreditation.

The states - Colorado, Minnesota, North Dakota and Virginia -joined nine others certified under the twoyear-old program, which recognizes that each state insurance department has met stringent financial regulation standards designed to strengthen its ability to monitor the solvency of insurance companies. Mr. McCartney further reported that the NAIC remains on track toward its "goal of certifying a substantial majority by January 1, 1994."

Further bolstering the NAIC's case against federal regulation was the report presented by U.S. Treasury Department Deputy Assistant Secretary John C. Dugan. Citing the consequences of failure of the federal deposit insurance scheme, Mr. Dugan declared that the U.S. Treasury Department does not think "that now is the time to move forward with a federal legislative regulatory scheme, particularly one that involves a federally guaranteed fund for policyholders." Mr. Dugan believes that the aggressive NAIC accreditation program is appropriate, and changes being instituted by the NAIC "should be given time to work before Congress moves forward with a full blown comprehensive legislative scheme to regulate the insurance industry at the federal level."

The globalization of insurance was more evident at this meeting than at previous ones. Sir John W. Swan, premier of Bermuda, addressed the opening session, while John Darwood from the NAIC noted in his report to the International Insurance Relations Task Force the presence of some 55 foreign delegates, including representatives from the European Community and the Organization for Economic Cooperation and Development. He also reported that the task force was now considering "the formation of an International Association of Insurance Supervisors" whose universe at present would encompass some 220 jurisdictions. "At this time next year I believe an association will be up and running."

The NAIC's Reinsurance Task

Force held off recommending the adoption of the latest version of the Limitations on Reinsurance Activities of Insurers Model Act (fronting bill) that would place new restrictions on the practice of fronting. …

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