Model Law Credit Extraterritorial Reinsurance

Federal law preempts the extraterritorial application of state credit for reinsurance law but permits a state to enact reinsurance collateral reforms on an individual basis if the state is accredited. The act enacts a model law adopted by the National Association of Insurance Commissioners (NAIC), which is necessary to maintain the continued accreditation of the Colorado division of insurance with the NAIC and makes Colorado's reinsurance statutes substantially similar to those found in other states. The model law specifies the grounds upon which a domestic insurer can get credit in Colorado for reinsurance provided by an assuming insurer that is domiciled in an extraterritorial jurisdiction and thereby avoids federal preemption that would otherwise occur by 2022.(Note: This summary applies to this bill as enacted.)