During a July 17, 2013 meeting of the National Association of Insurance Commissioners’ (“NAIC”) Financial Condition Committee, regulators reviewed the draft “White Paper on Captives and Special Purpose Vehicles” and contemplated the creation of a captive transactions review board in the wake of solvency concerns about the use of captives by life insurers.

Proposed additional charges for the NAIC’s Financial Analysis Working Group would include:

• Performing analytical reviews of transactions (occurring on or after a date as determined by the NAIC membership) by nationally significant U.S. life insurers to reinsure XXX and/or AXXX reserves with affiliated captives, special purpose vehicles (SPVs), or any other U.S. entities that are subject to different solvency regulatory requirements than the ceding life insurers, to preserve the effectiveness and uniformity of the solvency regulatory system.
• For such transactions entered into and approved prior to this date and still in place, the collection of specified data in order to provide regulatory insight into the prevalence and significance of these transactions throughout the industry.
• Provision of recommendations to the domiciliary state regulator to address company specific concerns and to the Principles-Based Reserving Implementation Task Force to address issues and concerns regarding the solvency regulatory system.