26 June 2013Analysis

CICA thanks NAIC for support in shadow insurance showdown

The Captive Insurance Companies Association (CICA) has sent a letter to the National Association of Insurance Commissioners (NAIC) to thank president Jim Donelon for his support of the industry in the face of superintendent of financial services Benjamin Lawsky’s report on shadow insurance.

The letter, signed by CICA president Dennis Harwick, reads: “CICA would like to take this opportunity to thank NAIC President Jim Donelon for his thoughtful rejection of  Mr. Lawsky’s call for a national moratorium and for his observation that the NAIC already has a process for  addressing some of the concerns identified by Mr. Lawsky without attacking the long established captive  insurance industry, which is carefully regulated by the various members of the NAIC who have been  authorised by their state legislatures to regulate captive insurance companies.”

CICA took particular issue with what Harwick called Lawsky’s “comments impugning the regulation of captive insurance companies in States with a long history of credible regulatory oversight” and called the comments "troubling".

Harwick’s letter reads: “CICA’s principle concern is that the traditional captive insurance market, from which our members are drawn, will be negatively affected by Mr. Lawsky’s concerns about a very narrow and unconventional form of reinsurance transaction used by banks and life insurance companies.”