Our Positions | Receivership/Insolvency - Recovery/Resolutions Plans

The NAIC has a task force that addresses issues related to insolvency of companies, including rehabilitation of troubled companies, the liquidation/receivership process for insolvent companies and the operation of the guaranty funds that pay the claims of policyholders of insolvent companies. These issues arise both in the U.S. context and in the international standards set to address resolution and recovery of global companies that operate across borders.

More particularly the task force duties include: monitoring the effectiveness and performance of state administration of receiverships and the state guaranty fund system; coordinating cooperation and communication among regulators, receivers and guaranty funds; monitoring ongoing receiverships and reporting on such receiverships to NAIC members; developing and providing educational and training programs in the area of insurer insolvencies and insolvency guarantees to regulators, professionals and consumers; developing and monitoring relevant model laws, guidelines and products; and providing resources for regulators and professionals to promote efficient operations of receiverships and guaranty funds.

The product from this task force relates to NAMIC members especially through the costs of insolvencies members incur from guaranty fund assessments. If the practices of the receiverships managing insolvent companies are inefficient and unnecessarily costly there will be fewer assets remaining to pay policyholder claims and more will have to come from the insurance marketplace.

NAMIC Position

NAMIC follows the issues that affect companies from the criteria for deeming a company in hazardous financial condition to the attempts at rehabilitation, efforts to liquidate and the operations and costs of guaranty fund. Insolvencies in the industry affect the reputation of the entire industry so NAMIC supports a strong, effective and efficient solvency regulatory system. Also, due to our members’ ultimate obligation to pay assessments to the guaranty fund NAMIC has an even stronger interest in the continued solvency of the companies operating in the insurance market.

Our advocacy goal is to maintain basic solvency, but not to prop up poorly managed companies. Consequently, once the regulatory decision is made that a company cannot be saved, we want the receivership/liquidation process to work as efficiently as possible to preserve assets that can protect the policyholders. If adequate assets do not remain in the insolvent company to meet basic policyholder obligations, then we support an efficient guaranty fund process to protect those policyholders and pay the claims incurred under the insolvent company. Overall, the main concern must be the protection of the policyholder.

NAMIC News on the NAIC and Receivership and Insolvency

NAIC Memo Recommends Changes to Holding Company, Certain Entities Be Exempt from the GCC

January 16, 2020 The Group Capital Calculation (E) Working Group issued a memorandum (Att. 1 – GCC Memo) to the Group Solvency Issues (E) Working Group regarding needed changes to the Insurance... Read more

SAPWG Pauses on Proposed Amendments to SSAP No. 43R, Will Move Forward with Issue Paper

January 16, 2020 The Statutory Accounting Principles (E) Working Group hosted a teleconference Jan. 8 to discuss comments received from industry representatives on a controversial proposal that, if adopted, would... Read more

Capital Adequacy Task Force Exposes New RBC Framework for Bonds

January 16, 2020 The next step to expand the number of bond designations in the property/casualty Risk Based Capital formula from six to 20 categories was formally taken as the CATF exposed for... Read more

Preliminarily Field-Testing Results of NAIC Group Capital Calculation Tool Revealed

December 13, 2019 Attendees of the Group Capital Calculation (E) Working Group meeting on Dec. 7 were among the first to look at preliminary field-testing results of the GCC tool being developed by the working group. NAIC staff has reviewed 31... Read more

NAMIC Presented on Homeowners – Responded to Underinsurance Questions

December 13, 2019 The Property and Casualty (C) Committee dedicated time to hear presentations from a trade panel that included NAMIC. The industry was charged with discussing possible underinsurance challenges and solutions, particularly in the context of... Read more


Michelle Rogers
Assistant Vice President - International & Regulatory Affairs