b'TABLE OF CONTENTSstate insurance laws and regulations for compliancewith its new reinsurance agreements with US cedents with the requirements of the Covered Agreements.(subject to the right of the reinsurer and a US cedent to If the FIO Director finds that a US jurisdictions lawscontractually negotiate a higher collateralization and regulations do not comply with theserequirement for their reinsurance agreement). requirements, such US jurisdictions laws will beIn late 2021, the NAIC Reinsurance Financial federally preempted. The FIO Director will completeAnalysis (E) Working Group approved a total of six any necessary preemption determinations bynon-US reinsurers for passporting as reciprocal September 1, 2022. In December 2021, at thejurisdiction reinsurers, for which the California meeting of the NAIC Reinsurance (E) Task Force, allDepartment of Insurance and the Maryland US jurisdictions were urged to adopt the amendedInsurance Administration acted as the lead state NAIC Models by no later than July 1, 2022 in orderinsurance regulators. As a reminder, the passporting to enable the FIO Director to complete this analysisprocess enables a reinsurer that has been approved in a timely manner. This gives those US jurisdictionsas a reciprocal jurisdiction reinsurer in a lead that have not yet adopted the amended NAICstate jurisdiction to apply for the same status in Models only a short window to finish adoptingother US jurisdictions. We also understand that them. Those states that have not yet finished theother states, such as Iowa, have approved process of enacting the amendments to the NAICapplications from certain non-US reinsurers to Credit for Reinsurance Model Law face a particularlybecome reciprocal jurisdiction reinsurers only in tight timeline. that state (i.e., without a subsequent application As we previously reported, the NAIC Models willprocess for passporting in the other states).also become an accreditation standard effective as of September 1, 2022, with enforcement by theOther Regulatory Developments NAIC commencing as of January 1, 2023. As a result,Related to Credit for Reinsuranceany states that fail to adopt the amended NAIC Models this year will risk losing NAIC accreditation.In September 2020, the lead insurance supervisors This provides yet another incentive for the states tofor the Republic of Koreathe Financial Services work as quickly as possible to adopt the amendedCommission and the Financial Supervisory NAIC Models. Servicesubmitted an application to the NAIC requesting that the Republic of Korea be First Reciprocal Jurisdictiondesignated as a Qualified Jurisdiction. Receiving Reinsurers Approved such status would have also paved the way for the Republic of Korea to become recognized by the We have seen a significant amount of interest in recentNAIC as a Reciprocal Jurisdiction. In May 2021, the months from various international reinsurers in applying forNAICs Mutual Recognition of Jurisdictions (E) reciprocal jurisdiction reinsurer status in those states thatWorking Group approved the Republic of Koreas have adopted the amended NAIC Models. Such statusapplication for Qualified Jurisdiction status after permits a reinsurer to post zero collateral in connectionconsulting with US federal authorities. However, this MAYER BROWN |77'