b'INSURANCE REGULATORY|US/NAICStates Continue Adoption of Amended Credit for Reinsurance Models as Federal Preemption Deadline LoomsAs we reported in our 2020 Year in Review, USlegislative and regulatory procedures that may be jurisdictions are currently revising their laws andin effect in a particular state, that process of regulations governing credit for reinsurance toimplementing the amended NAIC Models may take implement the amendments to the Nationalmany months to complete. Association of Insurance CommissionersAs of early January 2022, 46 jurisdictions had (NAIC) Credit for Reinsurance Model Law andenacted the amendments to the NAIC Credit for Model Regulation (the NAIC Models). TheReinsurance Model Law, of which 26 had also amended NAIC Models are intended to satisfyadopted regulations incorporating the the requirements of the bilateral agreements onamendments to the NAIC Credit for Reinsurance insurance and reinsurance entered into by theModel Regulation and 10 had proposed such US with the European Union and the UK in 2017regulations that were still pending adoption. The (the Covered Agreements). After the NAICmajor US jurisdictions that had not yet enacted completed its drafting of amended NAICthe amendments to the NAIC Credit for Models in 2019, the following two years sawReinsurance Model Law included the District of legislative efforts and action by state insuranceColumbia, Hawaii, New Jersey, New Mexico, regulators across the US implement thePuerto Rico and Wisconsinalthough a number amendments. Now, for those states that haveof these jurisdictions had legislation pending to not yet completed these efforts, the federalenact these amendments. Overall, over one-half preemption deadline is looming. of all US jurisdictions had not completed their processes required to adopt the amended NAIC Status of Adoption of the AmendedModels as the new year began. This will likely NAIC Models result in a scramble over the next few months, as For a state to adopt the amended NAIC Modelswe head into the final stretch before the US typically requires two steps. First, the statesfederal authorities will be required to commence legislature must enact legislation amending thetheir analysis as to whether the insurance laws of states credit for reinsurance statutes to conformthose states that have not adopted legislation with the NAIC Credit for Reinsurance Model Law.satisfying the requirements of the Covered Second, after this legislation is enacted, the statesAgreements should be federally preempted.insurance regulatory authority must adopt amendments to its credit for reinsurance modelHow Federal Preemption Would Workregulations to conform with the NAIC Credit forThe Covered Agreements require the Director of Reinsurance Model Regulation. Due to the variousthe Federal Insurance Office (FIO) to evaluate US 76|Global Insurance Industry Year in Review 2021'