Insurance and Real Estate Committee
JOINT FAVORABLE REPORT
Bill No.: HB-6392
AN ACT CONCERNING THE INSURANCE DEPARTMENT'S
Title: RECOMMENDATIONS REGARDING CREDIT FOR REINSURANCE.
Vote Date: 3/22/2021
Vote Action: Joint Favorable
PH Date: 2/11/2021
File No.:
Disclaimer: The following JOINT FAVORABLE Report is prepared for the benefit of the
members of the General Assembly, solely for purposes of information, summarization and
explanation and does not represent the intent of the General Assembly or either chamber
thereof for any purpose.
SPONSORS OF BILL:
Insurance and Real Estate Committee
REASONS FOR BILL:
This bill will adopt the Insurance Department's recommendations regarding credit for
reinsurance.
RESPONSE FROM ADMINISTRATION/AGENCY:
State of Ct Department of Insurance testimony stated The Model Law revisions and the
requested legislation would eliminate reinsurance collateral requirements for reciprocal
reinsurers that have their head office or are domiciled in any of the following: (1) a country
that is a member of the European Union (or any other non-U.S. jurisdiction that is subject to
an in-force covered agreement addressing the elimination of reinsurance collateral with U.S.
ceding insurers; (2) a U.S. jurisdiction accredited by the NAIC; (3) a non-U.S. jurisdiction
(currently, Bermuda, Japan, Switzerland and the United Kingdom as non-E.U. member
countries) recognized as a qualified jurisdiction that meets certain additional requirements
consistent with the terms of a covered agreement. The Covered Agreements require
Connecticut and other states to eliminate reinsurance collateral requirements for E.U.
reinsurers and U.K. reinsurers that maintain a minimum amount of own funds equivalent to
$250 million and a solvency capital ratio of 100% under Solvency II in order for US insurers
that cede risks to them to take credit for such reinsurance on their financial statements.
Adoption of the 2019 revisions to the NAIC Credit for Reinsurance Model Law and Model
Regulation is required for NAIC Accreditation by September 1, 2022.
NATURE AND SOURCES OF SUPPORT:
American Council of Life Insurers and the Insurance Association of CT Passage of
6392 strengthens and maintains the state-based regulatory structure that Congress so
clearly set forth in the McCarran-Ferguson Act. In conclusion, Connecticuts insurance market
is robust, which means insurers need broad access to reinsurers doing business all over the
world. By adopting HB 6392, this general assembly would be preserving Connecticut
domestic insurers ability to access reinsurance without the strict collateral requirements.
Further, passage of HB 6392 would help the Connecticut Insurance Department maintain
accreditation with peer states through the NAIC, thereby upholding a strong state-based
regulatory framework.
NATURE AND SOURCES OF OPPOSITION:
None Express
Reported by: Diane Kubeck Date: March 29, 2021
Page 2 of 2 HB-6392


Statutes affected:
Raised Bill:
INS Joint Favorable:
File No. 339: