Uniform Treatment of Creditors’ Rights: Fundamental to Global Insurance and Reinsurance Regulatory Advances

Abstract

As insurance (and reinsurance) regulators strive to harmonize global insurance regulations, modern initiatives undertaken by the European Commission (EC) on behalf of European Union (EU) members, the National Association of Insurance Commissioners (NAIC) in the United States and the International Association of Insurance Supervisors (IAIS), have not addressed reconciling resolutions of creditors’ rights when insurance companies become financially impaired or insolvent. Unless the EU’s Solvency II and the NAIC Solvency Modernization Initiative (SMI), whose jurisdictions dominate global insurance markets, incorporate equitable treatment of creditors when one or more insurers and/or reinsurers within a holding company enterprise face potential financial or actual failure, it is difficult to imagine that local regulators will not succumb to protectionist measures to preserve local assets under these circumstances.