Reinsurance (E) Task Force

The Reinsurance (E) Task Force (“RTF”) of the US National Association of Insurance Commissioners (“NAIC”) met on August 11, 2025 at the NAIC’s Summer 2025 National Meeting in Minneapolis, Minnesota. In addition to routine matters such as adoption of the minutes from the RTF’s meeting on March 4 and adoption of the RTF’s 2026 Proposed Charges, the meeting covered the following matters.

Certified and Reciprocal Jurisdiction Reinsurers

The RTF received and adopted a report from the Reinsurance Financial Analysis (E) Working Group (“ReFAWG”). ReFAWG meets in regulator-to-regulator sessions to assess certified and reciprocal jurisdiction reinsurers for passporting. As of August 11, 2025, ReFAWG has approved 101 reciprocal jurisdiction reinsurers (an increase of four since ReFAWG last provided a report to the RTF on March 4, 2025) and 42 certified reinsurers (an increase of one since March 4, 2025) for passporting. ReFAWG reported that 49 states and territories have already passported at least one reciprocal jurisdiction reinsurer.

“Passporting” is the process under which a reinsurer applies to an initial or “lead” state for recognition as a reciprocal jurisdiction reinsurer or certified reinsurer, following which ReFAWG evaluates and makes its recommendation concerning the status (and any related rating for the reinsurer). Other states can then choose to defer to the lead state’s determination for recognizing a reinsurer as a reciprocal jurisdiction reinsurer or certified reinsurer, which leads to administrative efficiency in obtaining and maintaining that status in multiple states given the reduced level of information that must be submitted to states other than the “lead” state. The list of passported reinsurers can be found on the NAIC’s Certified and Reciprocal Jurisdiction web page.

Life Actuarial (A) Task Force Working Group

• The RTF received an update from the Life Actuarial (A) Task Force Working Group (“LATF”) on a project LATF has been working on to develop a new actuarial guideline requiring asset adequacy testing (“AAT”) to be performed using a cash flow-testing methodology for certain life and annuity reinsurance transactions. The Actuarial Guideline LV (“AG 55”) was adopted by LATF in June 2025, by the Life Insurance and Annuities (A) Committee in July 2025 and by the Executive Committee and Plenary on August 13, 2025. The aim of the project was to gain insight into asset adequacy when business is ceded offshore, in order to address the risk that reinsurance transactions may reduce transparency regarding the reserves held for the reinsured business as well as the risks associated with the assets supporting those reserves. AG 55 was discussed further at the LATF meeting at the Summer 2025 National Meeting—see our Legal Update, “US NAIC Summer 2025 National Meeting Highlights: Asset Adequacy Testing for Reinsurance.”

Mutual Recognition of Jurisdictions (E) Working Group

The RTF received a status report from the Mutual Recognition of Jurisdictions (E) Working Group (“Mutual Recognition WG”), but did not adopt the status report, as the Mutual Recognition WG now reports directly to the Financial Condition (E) Committee rather than to the RTF. As previously reported, the Mutual Recognition WG last met on October 24, 2024, when it reapproved Bermuda, France, Germany, Ireland, Japan, Switzerland, and the United Kingdom as qualified jurisdictions, and Bermuda, Japan, and Switzerland as reciprocal jurisdictions. The European Union and the United Kingdom qualify as reciprocal jurisdictions based on the existing respective Covered Agreements. According to the Mutual Recognition WG, Bermuda, Japan, and the United Kingdom are in the process of making changes to their regulatory systems; the NAIC staff are monitoring the implementation of these changes, and will report any findings to the Mutual Recognition WG.

Ongoing NAIC Projects That Affect Reinsurance

The RTF heard a report regarding the following current projects at the NAIC that affect reinsurance:

• The RTF is conducting internal discussions in preparation for a potential proposal to address concerns regarding offshore life reinsurance. It was emphasized that any type of proposal will go through the regular public process, and that there will be sufficient opportunities for public comment.
• As previously reported, the Macroprudential (E) Working Group adopted a reinsurance worksheet in June 2023. The worksheet is an optional tool for state insurance regulators to understand reinsurance transactions of the insurance companies that they regulate; however, neither the Financial Analysis Handbook nor the Financial Examiner’s Handbook will require the use of the worksheet, and it will not affect the policies or procedures of the RTF. (The Financial Condition (E) Committee adopted the worksheet at the NAIC Summer 2023 National Meeting.) Further, the information provided to state regulators through the reinsurance worksheet will remain confidential. The RTF asked for feedback from those who had used the worksheet.
• The Valuation Analysis (E) Working Group is conducting its third year of reviews of Actuarial Guideline LIII—Application of the Valuation Manual for Testing the Adequacy of Life Insurer Reserves (“AG 53”), which covers AAT for life insurers. The RTF has focused on this process from the perspective of reinsurance issues for the Covered Agreements with the European Union and the United Kingdom. The review is ongoing and being conducted by a wide range of people, including actuaries from the NAIC, regulators, investment experts, financial staff, and other subject matter experts.
• The Statutory Accounting Principles (E) Working Group expanded funds withheld and modified coinsurance (“Modco”) reporting. A new Schedule S part 8 to be added to the life/fraternal annual statutory financial statement, specifically identifying assets associated with funds withheld and modco reinsurance agreements, was adopted at a May 22, 2025 interim meeting of the Statutory Accounting Principles (E) Working Group and is in the process of being implemented. For additional discussion of this topic, see our Legal Update, “US NAIC Summer 2025 National Meeting Highlights: Investment-Related Highlights.”

Proposal on Unearned Premium Reinsurance Collateral

The RTF heard a presentation on a proposal to allow a new type of surety bond to be permitted as reinsurance collateral, which could be counted for partial credit for reinsurance ceded by a property and casualty company. The proposed bond is contemplated to be a replacement for a letter of credit, and could serve as reinsurance collateral only to the extent of the unearned premium reserve; the bond would not supplant the need for reinsurance collateral for loss reserves, loss adjustment expense reserves, or incurred-but-not-reported (IBNR) reserves. Currently, such surety bonds do not meet any of the definitions of permissible reinsurance collateral in Section 3 of the NAIC Credit for Reinsurance Model Law. The RTF took no action on the proposal at this meeting, but noted that each state can make the determination for itself as to whether such surety bonds may be acceptable collateral for reinsurance.

To view additional updates from the US NAIC Summer 2025 National Meeting, visit our meeting highlights page.