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IAIS White Paper—Regulation and Supervision of Captive Insurers

Holding Globe
December 10, 2015

The International Association of Insurance Supervisors (IAIS) adopted an Application Paper on the Regulation and Supervision of Captive Insurers late last month. The stated intention of the IAIS is for the paper to provide guidance for the government regulation and supervision of captive insurers or reinsurers. 

The paper was approved following a period of commentary (July 15–August 24, 2015) on an earlier draft from May 2015. The Delaware Department of Insurance, Vermont Captive Insurance Association, and National Association of Insurance Commissioners were among approximately 10 organizations that submitted comments. The overall tone of the comments was that the paper should provide valuable guidance to regulators. The Delaware Department of Insurance commented, the "… Paper's release is timely because presently there is continuous growth not only in the number of captive insurers, but more importantly for purposes of this Paper, growth in the number of captive insurance domiciles. However, the growth in experienced captive insurance regulators has not kept pace and therefore experienced regulators are in short supply. While this Paper will assist the experienced regulator, it will be even more important for the new captive regulator because it will provide a blueprint for effective regulation."

In addition to reading the paper that was adopted by the IAIS, the IAIS compilation of all the submitted comments is worthy of review. Reading this information should help answer the question of whether the IAIS paper should become best practice guidelines for captive domicile regulators.

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