The National Association of Insurance Commissioner’s (NAIC) draft proposal has not been overly welcomed by the industry.
The proposal, which would subject certain captive insurers to ‘Part A’ accreditation standard and require the captives to abide by the same laws applicable to commercial insurers, has received opposition from a number of firms and captive associations across the US.
The NAIC proposals would apply to any property and casualty or life and health captive operating in at least one state other than its state of domicile. It would also apply to these captives reinsuring business that was directly written by a ceding insurer in at least two states.
Michael Coulter, president of the South Carolina Captive Insurance Association, in a statement, said that “such an interpretation would be disastrous for the captive insurance industry.”
He requested that the NAIC add suitable language to the preamble clarifying that captives are not subject to the ‘Part A’ accreditation standards.
Captive management firm Atlas Insurance Management registered its opposition on March 20, 2015.
Martin Eveleigh, chairman of Atlas Insurance Management, said: “I firmly believe that captive insurance, just like commercial insurance, is a broad economic and social good, helping turn the wheels of commerce and allowing for-profit and not-for-profit entities to take and manage the risks inherent in the transaction of any business.
“The adoption of this proposal would deny this good to many companies, including clients of Atlas, whose businesses operate across state lines.”
Martin Eveleigh, South Carolina Captive Insurance Association, NAIC, North America, Michael Coulter, Insurance