PCI stresses need for uniform approach in finite re probes

The Property Casualty Insurers Association of America (PCI) is calling on state regulators to adopt a consistent approach in their investigations into the use of finite reinsurance transactions by insurers. The investigations launched earlier this year by the Securities Exchange Commission (SEC) and New York’s attorney general Eliot Spitzer into the books of the AIG group has produced a snowballing effect as state regulators have begun their own probes into the use of finite re by the insurance industry.
The PCI says that the National Association of Insurance Commissioners (NAIC) would be the ideal forum for state regulators to develop a uniform approach to the finite re issue, and thus avoid creating a "crazy quilt of confusing and conflicting investigative practices and compliance rules". The PCI notes that, "while there may be a need for increased disclosure requirements that would alert regulators to the types of contracts that may demand closer review, we don’t think the current investigations into such practices by the FBI [Federal Bureau of Investigation], SEC and others is an indictment of the state regulatory system".