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On October 25, 2023, the Monetary Situation (E) Committee (the “E Committee”) of the Nationwide Affiliation of Insurance coverage Commissioners (“NAIC”) adopted revisions to the Property and Casualty Insurance coverage Warranty Affiliation Mannequin Act (#540) which might guarantee warranty fund protection following insurance coverage enterprise switch or company division transactions. The adopted draft is protection impartial in that if there was warranty fund protection earlier than the transaction the protection would stay, but when there was not warranty fund protection earlier than the transaction protection wouldn’t end result from the transaction. The adopted draft contains elective language that would offer protection for assumed claims transactions.
The adopted revisions shall be introduced to the complete Government & Plenary on the Fall Nationwide Assembly in December. Proposed language was first uncovered within the Spring through the Receivership Regulation (E) Working Group. In a matter of months public feedback have been obtained, technical revisions drafted and re-exposed, and the proposal moved up from the working group to the Receivership & Insolvency (E) Activity Pressure which authorized the revisions earlier this month and now to the E Committee. That is comparatively fast and last adoption is anticipated on the Fall Nationwide Assembly. Following adoption by the NAIC Government & Plenary, states might want to act independently to implement the revised mannequin into their very own legal guidelines.
The E Committee additionally unanimously accepted for consideration written feedback and paperwork pertaining to the proposed Framework for Regulation of Insurer’s Investments. The Chair emphasised that E Committee working teams and activity forces is not going to cease their present work in help of this initiative, singling out RBC initiatives and the Valuation of Securities (E) Activity Pressure’s work on collateralized mortgage obligations (“CLOs”) and different structured securities. The E Committee will take oral feedback on the Fall Nationwide Assembly.
Locke Lord will proceed to watch developments on the NAIC and throughout the E Committee particularly. When you’ve got any questions please contact the creator.
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