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Receiver’s Handbook forInsurance Company Insolvencies

E. Proof of Claim Forms

Once the list of claimants is developed, the receiver typically sends a proof of claim form to each person identified. The proof of claim form, which is the basic prerequisite to the allowance of a creditor’s claim, serves a number of useful purposes. First and foremost, it identifies the claimant and the nature and extent of the claim. The receiver also may use the form to calculate the extent of the insolvency, to identify any obligations the claimant may owe the insurer (e.g., through the identification of any setoffs), to set reserves and to determine the estate’s right to collect reinsurance.

Many proof of claim forms have been developed over the years. Claim forms to be used in any particular proceeding should be tailored to the circumstances presented. For example, the receiver should consider whether claims forms must be filed by all claimants. Most state statutes permit the receiver to dispense with the issuance of claim forms in a life receivership. The receivership simply draws a list of creditors from the insurers’ books and records. In many settings, filing with a guaranty association may constitute filing with the receiver for purposes of satisfying a bar date, but the receiver may need additional information from the claimant that the guaranty association did not elicit. Guaranty associations and receivers should coordinate the claims filing process. With receivership court approval, receivers may deem open claims, as reflected on the books and records of the insolvent insurer, to be timely filed claims. In such circumstances, proofs of claim need not be filed by insureds or third-party claimants for these open claims.

Before any form is created, the receiver will want to determine the number and types of claim forms that will be needed. The first task is to identify in broad categories the various classes and types of claimants. Then the receiver can determine what information is required for each type of claim. With this information, specific proof of claim forms can be developed for each major type of claimant. Some receivers use only one claim form, but use control numbers (such as an alpha-numeric system) to designate the type of claim presented in the form. This saves the cost of developing separate forms. On the other hand, in surety receiverships, the receiver may wish to use a separate proof of claim form for each type of bond. Either way, the objective is to minimize the amount of exchange required between the claimant and the receiver in order to adjust and later adjudicate a claim.

The more specific the information that can be elicited in the initial proof of claim form, the less follow-up will be required. The receiver, however, may require the claimant to present supplementary information or evidence, may take testimony under oath, may require production of affidavits or depositions, or may otherwise obtain additional information or evidence (IRMA Section 702 C). The receiver may send prompt determinations regarding the class of creditor, if any, that applies for each proof of claim, leaving the determination of an approved amount open for a later date. The class determinations should be subject to a right of appeal by the claimant. The prompt determination of creditor class permits a faster wind down, and also facilitates more prompt calculations and distributions for creditor claims. It may be unnecessary to determine the amount of receivership claims for a creditor class if receivership assets are unavailable for that creditor class.

Most statutes require claimants to provide certain basic information. (See IRMA Section 702.) The following information typically is required:

The nature and particulars (e.g., the who, what, when, where and amount) of the claim asserted;

The consideration for the claim;

The identity and amount of any security held on the claim;

Any payments made or received on the claim;

Formatted: Bottom: 0.38"

Attachment A

Chapter 5 - Claims

A copy of each written instrument upon which the claim is founded or a statement of the reasonsa copy of the instrument(s) cannot be provided;

The amount and a description of the source of any salvage or subrogation collected or which maybe collected;

An affirmation (notarized) that the insurer justly owes the sum sought and that there is no setoff,counterclaim or defense to the claim (IRMA Section 702 A); and,

The name and address of the claimant and any attorney representing the claimant.

Additionally, IRMA requires that the claimant provide: 1) its Social Security number (SSN) or federal employer identification number; and 2) any right of priority of payment or other specific right asserted by the claimant (IRMA Section 702 A).

Many estates make proof of claim forms available by way of the Internet. The NAIC has developed an Internet-based software application (ClaimNet) that allows proof of claim forms to be filed electronically. After considering all available information, the receiver may elect to utilize ClaimNet if it is in the best interests of the estate.

The receiver may decide to use the same claims and policyholder service forms that the insolvent company previously employed, because the information required is fairly uniform, and the use of different forms could be confusing to the service providers and policyholders. Additonally, many estates make proof of claim forms available for easy access via the receiver’s office website.

The receiver decides what additional supporting documentation will be required to prove a claim and in what form it should be submitted. (See IRMA Section 702 C.) Different documentation will be needed for different types of claims. For example, death benefit claims require the furnishing of a death certificate. Accident and health claims may require a physician’s certification and copies of medical bills. Return premium claims may be established simply by submitting a bordereau of all cancelled policies and return premium amounts attributable thereto, while computer summaries may be required to prove cumbersome or complicated claims. When policyholders claim return premium, the receiver may require additional documentation, such as copies of cancelled checks. Reinsurance claims may require yet another form of documentation. Life insurance claims usually require the policyholder to furnish the original policy. If the original cannot be provided, a copy thereof may suffice. If neither the original nor a copy of the policy can be furnished, a lost policy form should be executed and submitted to the receiver.

The level of detail required in the proof should conform to industry standards and statutory guidelines, as well as make it convenient for the receiver to communicate with the claimant and add the information to its database for claims management. Some estates may not process a claim that does not include all the requested information. Keep in mind that there may be other potential recipients or users of this information, such as guaranty associations, reinsurers and other receivers or regulators.

The receiver must determine who may submit a proof of claim on behalf of an entity and what form of verification is required. Because corporations can act only through their designated agents, it is best to determine and inform corporate claimants who may sign on their behalf (e.g., officers, directors, managing general agents or attorneys). Generally, a director does not have authority to act for a corporation because directors must act as a body unless otherwise authorized by the company’s by-laws. In most instances, the notarized signature of an individual who attests to his authority to do so will suffice. The signature of a trustee should be received when dealing with trust claims, and the trust document should be provided to the receiver to verify the identity of the trustee. If in doubt as to the capacity or authority of an individual who submits a claim on behalf of a corporation, partnership or trust, the receiver may require that the claimant provide a certificate of incumbency, signed by another authorized officer or representative, as to the signer’s authority to bind the entity. In the case of a corporation, partnership, trust or individual, the receiver may also require a signature guarantee if in doubt as to the identity of the individual executing the claim. Careful drafting of the attestation will

Comment [NAIC1]: The majority of edits/revisions are from the Florida CFO unless otherwise noted.

Attachment A

Receiver’s Handbook forInsurance Company Insolvencies

ensure that such authorization has been given to the signatory. Note that the availability of notarizations may depend upon the residence of the claimant. Although most foreign countries maintain their own systems for verification, notaries may be found at most American embassies.

When developing proof of claim forms, it is helpful to have in mind the volume, type and class of claims that creditors may submit. Claimants, including guaranty associations and reinsured creditors, may have hundreds of outstanding claims against the insured. Some claimants may be permitted to file a single omnibus proof of claim for all claims against the receivership estate. IRMA Section 702 D allows a single omnibus claim to be filed by guaranty associations, which may be periodically updated without regard to the bar date, and the guaranty association may be required to submit a reasonable amount of documentation in support of the claim. Also, for reinsured creditors, the receiver will want to decide whether these claims need to be submitted individually or on a bordereaux basis. There are certain advantages to bordereaux submissions, which are dictated by the sheer volume of claims, the requirements of the treaty and the receiver’s need to efficiently process reinsurance recoveries. Ceding treaty retrocessionaires may only be able to file claims on bordereaux. There are other claims submission methods that might be used for reinsurance recoveries, depending upon the complexities of the situation. In the final analysis, the preferred submission approach ordinarily is the one which permits an orderly and efficient administration of claims on a computer system, and often closely follows the procedures formerly in effect when the company was in operation.

F. Coordination and Communication with Reinsurers

Coordination and communication between receivers, reinsurers and other relatedinterested parties can be challenging. This can be influenced by what language is in a state’s receivership laws and whether they are based upon provisions of the NAIC’s Insurers Rehabilitation and Liquidation Model Act Section 40 or the current Insurer Receivership Model Act (555) Sections 701 (Filing of Claims) and 702 (Proof of Claim) or otherwise known as IRMA. Most states had already adopted the former while only two states have adopted Sections 701 and 702 of Model 555.

Once a receivership order has been entered, regardless of whether it is for rehabilitation or liquidation, one of the first actions that can be taken is to mail notices of the receivership to the company’s agents, policyholders/members, reinsurers, and other parties related to the receivership. These notices should contain information regarding the claims processing filing process and references to the receiver’s office website,. whichThe website should be kept updated with receivership information relevant to consumersinterested parties. Similar receivership notices are also provided to insurance departments of other states in whichwhere the company is licensed.

The receiver or state liquidation office should compile a list of all reinsurance participants that wouldto include all assumed, ceded, and retrocessional participants. The list shouldwould be compiled byfrom information contained within current year and prior two years’ company annual statement information. One of the most critical needs of Rreinsurance general creditors involves most critical need is for financial information on an insolvenet ceding company. Providing regular financial statements of the company will be beneficial to interested parties.Those needs include: complete balance sheet information, estimates of ultimate dividends, obstacles and disputes preventing or slowing an estate’s closure, time table for closing an estate and final dividends, etc. It is recommended the company’s financials be transparent and to provide at a minimum, annual status reports to be filed with the liquidation courts.

Where staffing, resources and availability permits, Tthe use of reinsurance specialists on staff at the office of the special deputy receiver’s office can serve as a primary liaison with a reinsurer or intermediaries on allmost matters relating to reinsurance during the life of a receivership.

Once a company is placed into receivership, it should be the duty of the reinsurance unit to send written notification of the receivership should be sent to the company’s reinsurers/intermediaries. regarding the receivership. Thise reinsurance unitspecialist should be will generally function as the primary receivership contact for the reinsurers/intermediaries and wouldserves to coordinate all issues relating to

Comment [NAIC2]: The CA CLO states these two sentences may be dropped. Although the information listed is desirable for general creditors, a few items, e.g. ultimate dividends, may be very difficult to estimate and thus, may be misleading.

Attachment A

Chapter 5 - Claims

reinsuance, including claims and collection activities, throughout the life of the receivership. The reinsurance unit staffspecialist wouldwill analyze and evaluate the company’s reinsurance program and applicable provisions in the reinsurance contracts with assistance from the receiver’s legal team as needed. The reinsurance unitspecialist wouldwill provide the claims section with thea list of reinsurers/intermediaries which should be providedto issue proof of claim forms, assists in the evaluation of any reinsurance related claims, and coordinate and communicate all matters with the claims and legal units as necessary. All communication with reinsurers should be processed or approved by the reinsurance unit staff. The reinsurance unitspecialist shouldmay also assist in resolving reinsurance-related claims prior to filing the claims recommendations with the court. Utilizing employees on staff with reinsurance experience who serve as the primary contact/liaison with reinsurers/intermediaries should significantly facilitate communication and coordination with these entities.

In order to provide some flexibility inOne approach to the claims filing processing process for reinsurers, would be to allow for claims couldto be submitted in any format acceptable to the receiver; as long asif the receiver (or the court) is in agreesment, a claim would not have to submitted on a proof of claim form. For example, Floridasome states does not require that the federal government submit its claims on proof of claim forms. Similarly, some states allow reinsurance the option claimants to file contingent and undetermined claims where the value of the claim is unknown at the time it is submitted to initially indicate a contingent claim value of $1.00 when filing their claim and submit supplemental information to prove their claim at a latersome future designated date. This allows the reinsurer to update their claims until a final bar date has been set near an estates closure date., if funds are available for the general creditor class. In Floridasome states, both reinsurers and guaranty associations have utilized this practice to the benefit of all parties involved.

Alternatively, to provide for more flexibility in the claim process andAnother consideration to expedite the filing of certain types of claims, permittingwould be to allow reinsurers/intermediaries to file “place holder” claims, similar tolike those of guaranty associations, whereby the reinsurers/intermediaries timely file claims but are permitted to supplement their claims as additional information becomes available later in the receivership process. And also, wWhen appropriate, utilizing deem filing practices ofwould be allowed for certain claims in receiverships. Generally, such orders are only sought in situations involving claims for which adequate claims documentation/proof exists within the records of the insolvent insurer.

If there are any issues or difficulties are encountered regarding the Proof of Claim form, it is suggested that the reinsurer contact the Special Deputy Receiver’s office directly with any concerns, describe the issue in reasonable detail and in writing, and provide as much information in response to as many items on the Proof of Claim form as possible. If the Special Deputy Receiver is made aware of an issue or problem in a timely manner, then some this may enhance the likelihood of a resolution can be arrived at that is in agreesment with the supervising court.

G. Hardship Claims

In the face of the claims payment moratorium that typically accompanies the initiation of a receivership proceeding, receivers may establish a hardship procedure to permit limited payments to be made to policyholders who meet specified criteria. Court approval of the hardship procedure is usually required. In deciding whether to implement hardship procedures, the receiver should consider the types of policies involved, the level at which the estate will eventually pay claims, and the existence, availability and amount of guaranty association coverage. The receiver should ensure that the hardship criteria and procedures are clear, well-documented and supported by an appropriate appeal process and court order.

Comment [NAIC3]: The CA CLO – In some states, it is mandatory that claims be submitted on the Liquidator’s proof of claim form. The sentence could be re-stated to say, “Claims must be submitted on the Liquidator’s proof of claim form unless the Liquidator grants an exception.”

Attachment A

Page 1 of 3

Notes and Comments

Draft Guidance of Proposed Best Practices to Chapter 5 of the Receivers Handbook for Insurance Company Insolvencies

To the attention of the NAIC Receivership Technology & Administration Working Group

Introduction

We very much thank the NAIC Receivership Technology & Administration Working Group for

having taken into consideration our submissions of September 2016 (attached) and would

like to comment on the draft guidance developed thereafter and to be inserted into the Re-

ceivers Handbook for Insurance Company Insolvencies (the “Handbook”) as follows:

Proposed Amendments and Additions

I. Place where to insert guidance in the Handbook

As reinsurance recoveries are a major asset of an insurer’s estate, we think it appropriate to

devote a specific chapter in the Handbook to the guidance on best practices when a reinsur-

er provides such asset but at the same time is or may be a creditor of the estate. We would,

however, propose to interconnect sub-sections E and F where applicable (see below).

II. Amendments to the language of Chapter 5, sub-section E of the Handbook

Receivers should be encouraged to request submissions from creditors which the company

in receivership has reinsured (“reinsured creditors”) in accordance with the format of report-

ing under the reinsurance contracts in question. This should just be complemented by a

comprehensive overview and breakdown of the total claimed by such reinsured creditor.

Additionally, whenever a reinsurer of the company in receivership has claims against the

estate or where a reinsured creditor at the same time is a reinsurer of the estate, receivers

should observe the guidance to be inserted in a new sub-section F of the Handbook.

III. Amendments to the language of Chapter 5, sub-section F of the Handbook

a. On a receivership’s website, receivers should not only provide information for con-

sumers, but also provide an overview of the current status of the receivership, past

and upcoming deadlines as well as provide access to the orders relevant to the re-

ceivership. To simplify the administration of the website, such information can be pro-

vided in the format of a simple table as some receivers’ websites already do.

Attachment B

Page 2 of 3

b. The aim of the receiver with a view to the estate’s reinsurers should be to arrive at a

net position as soon as the winding down of the estate permits. Receivers should

therefore be encouraged to opt for the least formal requirements possible according

to their state’s receivership laws in order to enhance communication with reinsurers

and to speed up the process of reconciling their claims.

In this respect, it is crucial to keep reinsurers updated of the development of the in-

sureds’ claims as is required by the respective reinsurance contracts. This develop-

ment will finally determine whether a reinsurer is a net debtor, i.e. an asset, of the es-

tate or a net creditor who shares in dividends in its class of creditors.

The above development will most likely also occur after deadlines for filing claims

have passed. Therefore, receivers should petition that the court allow reinsurers to

not formally file a claim at all but instead deem the claims filed, if the reinsurer is

known as an asset of the estate from the books and records of the company in re-

ceivership. If the state’s receivership laws prohibit deemed filings, reinsurers should

be allowed to file contingent claims (for example, “placeholder claims” at a nominal

value of USD 1.00 only) that are amended and proven when the development of the

receivership so permits.

This will usually be the case as soon as the receiver has resolved all the claims of in-

sureds which can (at least in part) be billed through to reinsurers. In this respect it is

comparable to the ordinary development of every reinsurance agreement, the run off

phase, albeit it is expedited in the course of the receivership.

It is important to note that the development of the insureds’ claims may not only result

in claims against the estates’ reinsurers. Whenever an insured’s claim is allowed at a

smaller amount than has already been paid, this will result in refunds that have to be

credited to the respective reinsurers. Additionally there might be reinstatement premi-

ums due to reinsurers, if an insured’s claim is allowed.

Consequently, the claims of reinsurers are highly, if not totally, dependent on the de-

velopment of the insureds’ claims. Thus, receivers should be encouraged to treat

claims of reinsurers as one factor amongst others adding to the net amount of the as-

set such reinsurers represent. In some cases, however, the overall result will be a net

claim against the estate, but at the point of time such claim is certain, it may be al-

lowed and will share in the dividends declared for the respective class of creditors.

c. For the reasons outlined in subsection b above the receiver will not want a reinsurer

to prove their claims and all the payments effected and received prior to the receiver-

ship at an early point of time in the receivership. Only to the extent that there is doubt

or dispute, the receiver will want the reinsurer to substantiate its position by submit-

ting supplemental information. This may occur at any point of time in the receivership,

and the receiver should be encouraged to reconcile such doubt or dispute as soon as

it transpires.

d. For the same reason, there is no practical need for a reinsurer to notarize any of its

declarations. Even if notarization was as uncomplicated and inexpensive in the rein-

surer’s jurisdiction as it is in the United States of America, it would not add value. The

Attachment B

Page 3 of 3

reconciliation should be a process organically following the development and agree-

ment of the insureds’ claims culminating in a net figure due to or from each reinsurer

of the estate.

If any further explanations are needed, we are happy to provide them.

November 2017

Attachment: Note on Reinsurer’s Participation in Receiverships, September 2016

Attachment B

Page 1 of 5

Reinsurers’ Participation in Receiverships

Challenges for Reinsurers and Receivers

To the attention of the NAIC Receivership Technology & Administration Working Group

About Hannover Re

Hannover Re, with a gross premium of around USD 19bn, is one of the leading global rein-

surers. Hannover Re transacts all lines of property & casualty and life & health reinsurance

and is present on all continents with around 2,500 staff. The rating agencies most relevant to

the insurance industry have awarded Hannover Re very strong insurer financial strength rat-

ings (Standard & Poor's AA- "Very Strong" and A.M. Best A+ "Superior").

Experts within Hannover Re have extensive experience in dealing with re-/insurance run-offs.

In 2003 Hannover Re was the first European reinsurer to establish a specialized “Run Off

Solutions” unit. The team of meanwhile 18 staff has well-established contacts to leading in-

surers and reinsurers and is conducting commutations and representing Hannover Re in re-

ceiverships all over the world. Members of the team regularly speak on run-off related topics

at conferences and other occasions.

Introduction

When an insurance company enters in receivership, a reinsurer which has reinsured this

cedent, has to follow certain rules and procedures in order to claim the payment of any out-

standing obligations. In general, the filing of a proof of claim is required from the reinsurer.

The formalities for the proof of claim are described in Section 702 of the NAIC Insurer Re-

ceivership Model Act (IRMA) (see appendix 1).

The experience of Hannover Re with the implementation and application of the NAIC IRMA

in various States has shown that more guidance would be helpful on how to apply the re-

quirements for proofs of claim to reinsurers. In order to further improve the efficiency and

appropriateness of the procedures, Hannover Re suggests to take into consideration the

specifics of the business relationship between primary insurers, reinsurers and retrocession-

aires. The exception for guaranty associations set out in Section 702 D of IRMA indicates

that some of the involved parties in a receivership procedure need specific attention.

From Hannover Re’s perspective, the practice in the State of New York for the reconciliation

of data without formal proofs of claim proves to be very efficient: If the books of the company

in receivership document the business relationship with a reinsurer, the reinsurer is automat-

ically recognized as a creditor in New York. This procedure supports a fast reconciliation

based on the latest available data in the best possible way.

Attachment B

Page 2 of 5

The following remarks serve to discuss selected provisions of Section 702 “Proof of Claim” of

IRMA and to describe the current challenges from a reinsurer’s perspective.

Challenges for reinsurers and receivers

Specific Requirements of IRMA, Section 702 “Proof of Claim”:

A. Proof of claim shall consist of a statement signed by the claimant or on behalf of

the claimant that includes all of the following that are applicable:

I. (1) The particulars of the claim including the consideration given for it;

Section 702 A (1) of IRMA stipulates that the claimant includes in his claims filing the particu-

lars of the claim. In addition to that, the common proof of claim forms in certain U.S. States

require the claimant to provide details of every single loss. In case of a reinsurance contract,

however, it needs to be taken into consideration that as a matter of principle, a reinsurer’s

claim against its cedent (in receivership) is related to premium only and seldomly to loss re-

funds. Claim forms, which require to provide information on every single loss, are thus not

drafted to accommodate this situation.

In principle, reinsurers cannot provide detailed claims data as the only information a reinsurer

has on file is what has been notified by the cedent. In case of a receivership of a cedent, the

cedent often stopped the regular claim’s reporting with the reinsurer. Thus, the reinsurer

cannot guarantee to have up to date numbers or further information on single claims in its

accounting system.

II. (3) The payments made on the debt, if any;

Section 702 A (3) of IRMA can lead to an unreasonable situation when reinsurers are re-

quired to compile a complete list of all payment transactions – and when receivers are re-

quired to check such list –, regardless of whether the single transactions are of concern or

not. In administrating the reinsurance contract, the majority of payment transactions under

current accounting do not cause any concern. Moreover, every reinsurer has to comply with

the legal accounting principles in its home jurisdiction. Demonstrating the payment flow of the

past years in non-disputed cases in a format possibly deviating from the one the data is

stored in, does not add value to the receivership. If, however, there is a dispute regarding

single transactions, it is reasonable to specifically reconcile the related data.

III. (4) That the sum claimed is justly owing and that there is no setoff, counterclaim or de-

fense to the claim;

Section 702 A (4) of IRMA requires reinsurers to provide data for which in effect only the

cedent has the accurate information. When a cedent is in receivership, reinsurers often have

Attachment B

Page 3 of 5

to operate with data which is not up to date because – as noted above – a cedent usually

suspends the regular accounting and reporting process to the reinsurer, sometimes years

before entering into receivership. As the reinsurer can not update the data on its own, those

out-dated numbers are of very limited use for the receiver.

In addition, at the time of filing the proof of claim, the reinsurer is not in a position to ascertain

that the sum claimed is justly owing and that there is no setoff or counterclaim. The reason

for this is that in rehabilitating or winding down the cedent, the receiver will first consider,

evaluate and agree the insureds’ claims. It will secondly report to the reinsurers their share of

the loss. It is important to note that only at this stage the reinsurer finds out about potential

setoffs or counterclaims of the cedent. Usually, this will occur in almost every case when the

claim filing deadline has passed already.

As a consequence, a reinsurer seldomly is in a position to present a final claim when the

proof of claim filing deadline passes as updated claim reports of the receiver will be sent to

the reinsurer at a later stage. Also, premium numbers may increase or loss payments might

have to be refunded. That is the reason why a reinsurer – just like a guaranty association –

should be allowed to periodically update its proof of claim without regard to the deadline

specified in Section 701 A.

Though, what a reinsurers can provide is how much premium or other claims, like refunds,

the cedent owes to the reinsurer (subject to pending adjustments). For these numbers a re-

insurer can give evidence, consisting of the cedent’s statements of account reported to the

reinsurer.

IV. B. The liquidator may require that a prescribed form be used, and may require that

other information and documents be included.

C. At any time the liquidator may require the claimant to present information or evi-

dence supplementary to that required under Subsection A and may take testimony

under oath, require production of affidavits or depositions, or otherwise obtain ad-

ditional information or evidence.

Section 702 B and C of IRMA leads to similar challenges as Section 702 A. As noted above,

any data not originating from the reinsurer is likely to be of no avail to the receiver as such

data is seldomly up to date. This refers to any loss data as well as to data on potential set-

offs, counterclaims and defenses of the cedent in receivership. If a reinsurer was to notarize

or swear to such data, the related oath could only be limited to the potentially outdated data

in the reinsurer’s books and the reinsurer would have to refuse any liability for completeness

or accuracy of such data. Consequently, such oath would be of no avail to the receiver.

Furthermore, notarizations in the U.S. can be carried out by lay notaries. This is in general

not the case in civil law countries, where mandating notaries-at-law generates a considerable

administrative burden together with substantial fees. Requiring reinsurers to notarize data

which is not up to date at considerable cost seems inefficient and could prohibit the reinsurer

from filing a justified claim if the related costs exceed the prospective dividend from the es-

tate.

Attachment B

Page 4 of 5

V. D. A guaranty association shall be permitted to file a single omnibus proof of claim

for all claims of the association in connection with payment of claims of the insur-

er. The omnibus proof of claim may be periodically updated by the association

without regard to the deadline specified in Section 701 A, and the association may

be required to submit a reasonable amount of documentation in support of the

claim.

Section 702 D grants facilitations to guaranty associations dealing with a considerable num-

ber of single claims. The situation of reinsurers is similar: Firstly, because reinsurers also

handle numerous claims as aggregated and reported by the cedent. Secondly, because they

are also professional counterparties of the cedent. This, and the explanations given above,

makes reinsurers eligible for facilitations in the claims filing process as well.

Proposed Solutions

We respectfully request the NAIC Receivership Technology & Administration Working Group

to consider the following proposed changes to the Receivership Handbook:

1. Reinsurers should be automatically recognized as claimants as soon as they appear in

the books of the company in receivership.

2. Reinsurers should not be required to use specific forms. Instead, reinsurers should be

allowed to report their claim to the receiver in any other comprehensive format evidenc-

ing the claim. If reinsurers were to use forms though, they should be drafted to account

for the specifics outlined herein. Additionally, reinsurers should be allowed to periodically

update their proof of claim without regard to the deadline specified in Section 701 A.

3. Reinsurers should not be required to report on potential setoffs, counterclaims or de-

fenses nor should they have to swear to their claims filing.

4. At any point in time, the receiver can approach the reinsurer to determine a final net

claim of the reinsurer or a net debt owed to the estate.

5. Items 1-4 should also apply to (retro-) cedents (if an insurer or reinsurer has (retro-) ced-

ed business to a company in receivership).

We very much appreciate the opportunity to bring this issue to the attention of the Receiver-

ship Technology & Administration Working Group. If any further explanations are needed, we

are happy to provide more details.

September 2016

Attachment B

Page 5 of 5

Appendix 1

Insurer Receivership Model Act

Attachment B