"National Association of Insurance Commissioners to Review Insurers’ Use of Captives"

On October 11, 2011, at a Joint Executive Committee Meeting and Plenary Session of the National Association of Insurance Commissioners (the "NAIC") held by conference call, the NAIC voted unanimously to adopt a charge to review the use of captive reinsurers and special purpose vehicles by insurance companies to transfer insurance risk on their books to these specialized companies.  In introducing the motion to adopt the charge, Superintendent Torti indicated that a May 8, 2011 article in The New York Times had prompted the review. 

This Stroock Special Bulletin briefly discusses the NAIC's charge and the NAIC's next step, and provides some background on captive reinsurers and special purpose vehicles.