Insurance regulation in a nutshell

(d)Title IV – Holding Companies

Following the kind of regulatory requirements found in state insurance laws, the NIA would regulate a National Insurer that is a member of an insurance holding company in the following respects: (i) regulation of extraordinary dividends, (ii) required registration of such a National Insurer, (iii) standards imposed on transactions between a registered National Insurer and its affiliates, and (iv) required Commissioner approval or non-disapproval of certain affiliate transactions involving a National Insurer.

(e)Title V – Receivership

Instead of following a state insurance insolvency law model in which a court appoints the state insurance regulator as receiver, the NIA provides for an administrative receivership in which the Commissioner appoints his Office as the receiver of a National Insurer. This follows the federal banking law model in which a non-judicial receiver (the Federal Deposit Insurance Corporation) is appointed for insured national banks.
The grounds for appointing a receivership are based on a mixture of state insurance insolvency law triggers (e.g., insolvency, hazardous financial condition) and federal banking law triggers (e.g., concealment, consent, money laundering).
The only express substantive receivership provision is one relating to the powers and duties of the receiver, which is based on state insurance insolvency law models. The remainder of the procedural and substantive receivership provisions (including those relating to automatic stays and other stays of proceedings, procedures and priorities for the allowance and disallowance of claims and standards for the treatment of reinsurance) will be subject to standards to be established by the Commissioner by regulation, which regulation is to be substantially similar to the corresponding provisions of the Uniform Receivership Law adopted by the Interstate Insurance Receivership Compact Commission in September 1998. Furthermore, in order to facilitate insolvency protection of consumers pursuant to Title VI (Insolvency Protection), the Commissioner’s regulation must contain provisions that are substantially similar to certain provisions of the NAIC Life and Health Insurance Guaranty Association Model Act, as in effect on the date of introduction of the NIA, and the NAIC Insurer Receivership Model Act, promulgated in December 2005.