Fla. Withdraws Added Finite Reinsurance Requirements

The Florida Office of Insurance Regulation has withdrawn proposed state-specific requirements regarding the accounting treatment of finite reinsurance, making it the second state in three weeks to do so. The office has opted instead to implement the uniform standards that the National Association of Insurance Commissioners is in the process of adopting.

“PCI is pleased with the actions of Commissioner Kevin McCarty and the OIR for its withdrawal of the proposed additional state-specific finite reinsurance requirements,” William Stander, PCI regional manager said. “PCI strongly supports insurer compliance with all reinsurance accounting guidance, and supports additional disclosures with respect to reinsurance contracts with ‘finite’ characteristics so that regulators can determine the contracts that they need to examine more carefully.”

The OIR issued a withdrawal notice to the finite reinsurance rule proposed earlier this year. This withdrawal appears to recognize that the NAIC is near final adoption of additional disclosures regarding finite reinsurance in the NAIC’s annual statement, including a CEO and CFO attestation.

“Our primary concern with the OIR proposal is that we wanted to avoid duplication,” Stander said. “It would have been very duplicative and burdensome for non-domestic companies defined as commercially domiciled to be required to provide one set of disclosures and attestations in the rest of the U.S. and a second set in Florida.”

“PCI recognizes that there is a critical need for national uniformity regarding this issue and that all states’ requirements should be coordinated with the NAIC,” Stander explained. “PCI urges other states to follow in Florida and New York’s footsteps by discontinuing any state-specific disclosures on finite reinsurance.”