Captive Affiliate Line Category

Transcription

1 Captive Affiliate Line Category For the purpose of reporting a reinsurer as captive affiliate on Schedule S (or F), the captive affiliate line categories shall include Affiliated Non-Traditional Insurers/Reinsurers Definition of Affiliated Non-Traditional Insurer/Reinsurer This disclosure is intended to capture cessions to affiliated insurance/reinsurance entities that are subject to a financial solvency regulatory system separate from that generally applicable to traditional insurers and/or reinsurers in the ceding entity s domestic jurisdiction. The definition of Affiliate is established in the NAIC Model Holding Company Act. An affiliated non-traditional insurer/reinsurer is an insurance or reinsurance company that reinsures risks only from its parent or affiliates, and is subject to a financial solvency regulatory system separate from that generally applicable to traditional insurers and/or reinsurers in the ceding entity s domestic jurisdiction. For the purpose of annual statement reporting, this definition shall be presumed to include the following, subject to the cedant s rebuttal to its domicile: 1. An affiliated insurance or reinsurance company licensed, authorized or otherwise granted the authority to operate in a single United States jurisdiction under any captive insurer law, special purpose insurer law, or other similar law separate from those applicable to traditional insurers and/or reinsurers. 2. An affiliated insurance or reinsurance company licensed, authorized or otherwise granted the authority to operate under any captive insurer law, special purpose insurer law, or other similar law separate from those applicable to traditional insurers and/or reinsurers, in any jurisdiction outside the United States. 3. Any other affiliated insurance or reinsurance company that by law, regulation, or order, or contract is authorized to insure or reinsure only risks from its parent or affiliate.

2 Captive Affiliate Line Category For the purpose of reporting a reinsurer as captive affiliate on Schedule S (or F), the captive affiliate line categories shall include Affiliated Non-Traditional Insurers/Reinsurers Definition of Affiliated Non-Traditional Insurer/Reinsurer This disclosure is intended to capture cessions to affiliated insurance/reinsurance entities that are subject to a financial solvency regulatory system separate from that generally applicable to commercial traditional insurers and/or reinsurers in the ceding entity s domestic jurisdiction. The definition of Affiliated is established in the NAIC Model Holding Company Act. An Aaffiliated Nnon-Ttraditional Iinsurer/Rreinsurer is an insurance or reinsurance company that is formed under special laws of a state or other jurisdiction that allow the company to reinsures only risks only from the its parent or affiliates and prohibit the issuance of direct policies to consumers, and is subject to a financial solvency regulatory system separate from that generally applicable to commercial traditional insurers and/or reinsurers in the ceding entity s domestic jurisdiction. For the purpose of annual statement reporting, this definition shall be presumed to include the following, subject to the cedant s rebuttal to its domicile: 1. An affiliated insurance or reinsurance company licensed, authorized or otherwise granted the authority to operate in a single United States jurisdiction under any captive insurer law, special purpose insurer law, or other similar law separate from those applicable to commercial traditional insurers and/or reinsurers. 2. An affiliated insurance or reinsurance company licensed, authorized or otherwise granted the authority to operate under any captive insurer law, special purpose insurer law, or other similar law separate from those applicable to traditional commercial insurers and/or reinsurers, in any jurisdiction outside the United States. 3. Any other affiliated insurance or reinsurance company that by law, regulation, or order, or contract is authorized to insure or reinsure only risks from its parent or affiliate. shall be assumed to be a captive, subject to the cedant s rebuttal to its domicile.4

3 Carolyn Cobb Vice President & Chief Counsel, Reinsurance & International Policy August 1, 2013 Jacob W. Garn, CFE, CPA Chief Examiner, Utah Insurance Dept. Chairman, NAIC Blanks (E) Working Group Re: Definition of Captive Affiliate ( BWG) Dear Mr. Garn: The American Council of Life Insurers (ACLI) represents more than 300 legal reserve life insurer and fraternal benefit society member companies operating in the United States. These member companies represent over 90% of the assets and premiums of the U.S. life insurance and annuity industry. ACLI appreciates the opportunity to offer these comments. ACLI members are committed to enhancing disclosure of life-affiliated captive transactions. We have recommended, for example, that states require each life-affiliated captive to obtain a NAIC company code and to reference any related group code in the NAIC database, whether or not it files a statutory blue book. We have proposed to the PBR Implementation (EX) Task Force enhancements to the Annual Statement as well. ACLI supports the changes that the Working Group has adopted for the 2013 Annual Statement. We also support the intention, as we understand it, of the drafters who ve undertaken to define a captive for purposes of the 2013 reporting of affiliate reinsurance transactions. We do have some concerns, though with the actual words-on-the-page, currently. The current phrasing of the definition seems to us overly complicated, and we believe it will cause confusion. Confusion will exist about, for example, how to report intercompany reinsurance done in the normal course of business. We urge that discussions about the appropriate definition of a captive continue, so that our common understanding matches the expression of our common understanding. Having expressed our concern, we suggest two edits and one substantive, two-part amendment as set out in the attached. Very truly yours, American Council of Life Insurers 101 Constitution Avenue, NW, Washington, DC (202) t (866) f carolyncobb@acli.com

4 ACLI s proposed amendments to the definition of a captive for 2013 Schedule F/S reporting of affiliate reinsurance transactions Definition of Affiliated Non-Traditional Insurer/Reinsurer This disclosure is intended to capture cessions to affiliated insurance/reinsurance entities that are not subject to a the financial solvency regulatory system separate from 1 that is generally applicable to commercial insurers and/or reinsurers in the ceding entity s domestic jurisdiction. The definition of Affiliated is established in the NAIC Model Holding Company Act. An Affiliated Non-Traditional Insurer/Reinsurer is an insurance or reinsurance company that is formed under special laws of a state or other jurisdiction that allow the company to reinsure only 2 risks from the parent or affiliates and prohibit the issuance of direct policies to consumers, and is not subject to a financial solvency regulatory system separate from 3 that is generally applicable to commercial insurers and/or reinsurers in the ceding entity s domestic jurisdiction. For the purpose of annual statement reporting, this definition shall be presumed to include the following, subject to the cedant s rebuttal to its domicile: 1. An affiliated insurance or reinsurance company licensed, authorized or otherwise granted the authority to operate in a single United States jurisdiction under any captive insurer law, special purpose insurer law, or other similar law separate from those applicable to commercial insurers and/or reinsurers. 2. An affiliated insurance or reinsurance company licensed, authorized or otherwise granted the authority to operate under any captive insurer law, special purpose insurer law, or other similar law separate from those applicable to traditional commercial insurers and/or reinsurers, in any jurisdiction outside the United States. 3. Any other affiliated insurance or reinsurance company that by law, regulation, or order, or contract is authorized to insure or reinsure only risks from its parent or affiliate shall be assumed to be a captive, subject to the cedant s rebuttal to its domicile. 4 1 This change would clarify that the captive is subject to a financial solvency regime though the regime is separate from that applicable to commercial (re)insurers. 2 Schedule S s existing affiliate reporting does not include non-affiliate reporting. Therefore, logically, breaking out affiliate reporting into captive and other cannot include non-affiliate reporting. 3 See Fn This addition would address instances where a company offshore is licensed as a commercial class of insurer but is in effect a captive by contract. Ver 7-31p-13

5 John Bauer, FLMI Vice President, Regulatory Reporting Prudential Financial Office: Connie Jasper Woodroof, FLMI NAIC Liaison StoneRiver x FAX: connie.woodroof@stoneriver.com August 1, 2013 Mr. Jake Garn, Chair Blanks Working Group National Association of Insurance Commissioners 2301 McGee, Suite 800 Kansas City, MO SUBJECT: Blanks Working Group items exposed for comment with an August 1, 2013 deadline for comment Dear Mr. Garn: Interested Parties ( IPs ) appreciate the opportunity to review and comment on the items exposed for comment during the Blanks Working Group ( BWG ) conference call on July 25, We offer our comments below IPs have no comment on the proposal IPs continue to be concerned about proposals for current year changes being considered well after the June deadline. The number of proposals being adopted during the June Blanks conference call is already straining industry resources for year-end implementation. The statement software vendors are due to begin their software testing with the NAIC on September 2, which becomes even more challenging when datacaptured changes are still being contemplated in August. Additionally, it will take extra resources on the part of the NAIC to revise the data base and to have the testing environment ready on time. Continuously making these types of last minute changes adds unnecessary complexity to the process and greatly increases the chances of errors on the part of all parties. Thank you for considering our comments. We look forward to discussing our comments with you on the conference call scheduled for August 6, John Bauer, FLMI Vice President, Regulatory Reporting Prudential Financial Connie Jasper Woodroof, FLMI NAIC Liaison StoneRiver

6 CC: Rose Albrizio, AXA Financial Keith Bell, Travelers Mary Caswell, NAIC Calvin Ferguson, NAIC Kim Hudson, Vice-Chair, California