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Nelson: Solvency II Could “Needlessly” Override State Laws

Sen. Ben Nelson, CEO of the National Association of Insurance Commissioners (NAIC), said U.S. supervisory rules should be treated as equal to Europe’s Solvency II, regardless of a deal on reinsurance collateral...
November 10, 2015

Ben Nelson

Sen. Ben Nelson, CEO of the National Association of Insurance Commissioners (NAIC), said U.S. supervisory rules should be treated as equal to Europe’s Solvency II, regardless of a deal on reinsurance collateral.

The U.S. Treasury Department, the U.S. Trade Representative (USTR), and the European Union continue to negotiate a reduction in collateral requirements for foreign reinsurers in the United States to smooth the way for full Solvency II equivalence. Sen. Nelson said that could “needlessly” override state laws protecting U.S. consumers. The NAIC has its own model law to achieve the same objective on reinsurance collateral requirements, and the group says a covered agreement is unnecessary.

“Even though federal action is unwarranted, if the Treasury Department and the USTR insist on moving forward with negotiating a covered agreement with the Europeans, then state insurance regulators should be a direct part of the negotiations, to ensure that mutual recognition is not paid for with unnecessary and potentially irresponsible preemption of state laws designed to protect our states’ consumers,” said Nelson, speaking at the Insurance Risk North America conference in New York on November 4.

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