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

Property/Casualty Committee Receives Testimony From Industry, Consumer Groups on Regulator Response to COVID-19

June 18, 2020 The NAIC Property and Casualty Insurance (C) Committee met by conference call on June 10. As reflected on its agenda, the meeting covered several topics including risk retention groups, the private passenger auto insurance study, and... Read more

Artificial Intelligence Working Group Concluding Its Work to Refine Principles Regarding Applicability to Insurance Industry

June 18, 2020 The NAIC Artificial Intelligence Working Group exposed on June 15 a version of its draft principles concerning artificial intelligence usage by insurers. The direction of the document changed significantly on the last call held on... Read more

Regulators Clash Over How to Account for Premium Refunds

June 18, 2020 The Statutory Accounting Principles (E) Working Group met on June 15 to vote on a proposal to determine how insurance companies are to account for premium refunds issued in response to COVID-19. Ultimately the working group determined that all... Read more

Casualty Actuarial and Statistical Task Force Releases Final Exposure of Predictive Modeling White Paper

June 18, 2020 The NAIC Casualty Actuarial and Statistical (C) Task Force exposed on June 12 for final comments its latest draft of a white paper on predictive analytics and modeling used in property/casualty homeowner and... Read more

Holding Company Changes Contemplated, New Exposure Released for Comment

June 18, 2020 The Group Capital Calculation Working Group exposed for comment amendments to the NAIC Insurance Holding Company System Regulatory Act (#440) for the purpose of starting the implementation process for the GCC, a tool being developed for... Read more


Jonathan Rodgers
Director of Financial and Tax Policy