U.S. insurers that are part of an internationally active group may be subject to supervisory colleges involving regulators from foreign countries, according to a new comments today from Michael Nelson, the chairman of law firm Nelson Levine de Luca & Hamilton, which represents insurers and reinsurers in regulatory matters as well as in complex litigation in multiple jurisdictions throughout the country.
Nelson released a primer this morning in anticipation of the Federal Advisory Committee on Insurance’s upcoming meeting, next Monday, August 6. The comments outline the latest developments in international regulation and the Federal Insurance Office’s recent activity.
The International Association of Insurance Supervisors (IAIS), for which FIO Director Michael McRaith is a member of the executive committee, is working on a Common Framework for the Supervision of Internationally Active Insurance Groups, shortened to ComFrame. IAIS describes this as an “internationally coherent framework for the supervision of internationally active insurance groups” (IAIGs).
This means that regulators from different countries can collaborate and coordinate efforts and exchange information about an insurer’s solvency, corporate structure, and governance processes.
While groups that have more than $50 billion in assets and $10 billion in gross premium, are active in three countries and write at least 10 percent of premiums outside of their home jurisdiction will be subject to foreign regulators under ComFrame, the framework also provides a method for international regulators to organize supervisory colleges for smaller insurers.
U.S. regulators, while not required, are expected to participate in ComFrame.
With international regulatory affairs presumed to be one of the biggest responsibilities for the FIO, Nelson notes that Director McRaith has indicated he has been working with the United States Trade Representatives as well as visiting important foreign regulatory offices and discussing issues pertinent to U.S. insurers looking to further establish themselves abroad—the China Insurance Regulatory Commission, the privatization of Japan Postal Insurance Company, the limits on reinsurance that can be written in Brazil by foreign insurers, and addressing conflicts between the U.S. and EU insurance regulatory systems by visiting the European Insurance and Occupational Pensions Authority.
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