CHICAGO--The National Assn. of Insurance Commissioners is considering urging Congress to reject efforts to expand the coverages that risk retention groups can write.
At the NAIC's fall meeting in Chicago this week, Nebraska Insurance Director Tim Wagner encouraged committee members to consider a new draft resolution that he said is designed to prevent risk retention groups from writing property coverages. Mr. Wagner also is vice chair of the NAIC's Property and Casualty Insurance Committee.
Currently, RRGs can write only commercial liability coverages, though buyer groups--including the Risk & Insurance Management Society Inc.--have lobbied Congress to expand the Risk Retention Act to allow RRGs to write property coverages as well.
The draft resolution notes that such an expansion should be blocked in part because "the recent insolvency of a major RRG has caused considerable problems for regulators and policyholders." It refers to the insolvency of National Warranty, a Cayman Islands-based company selling automobile warranties, which had operations in Lincoln, Neb.
Jim McIntyre, Washington-based counsel for RIMS, asked questions about the resolution at the meeting. He later said he hopes to work with commissioners to revise the document.
Also during the meeting, several property/casualty insurance representatives told members of an NAIC subcommittee that a proposal to increase insurers' risk-based capital requirements would have many undesired consequences.
In addition, the Reinsurance Task Force slowed down discussion of reducing collateral requirements for mostly non-U.S. reinsurers by appointing two new subgroups to research accounting and collectibility issues.
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