Reinsurers wield financial power which is unmatched by other commercial sectors because without adequate reinsurance capacity those sectors simply cannot function. Congress understood this when it created the McCarran-Ferguson framework. Congress continues to discuss whether the states are up to applying regulation to the business of insurance. All of the proposals would require congressional action, because the Supreme Court has ruled that under current law no state may regulate on behalf of another or cede the authority to regulate insurance to a private entity. The NAIC addresses the political viability concerns by ignoring the Supreme Court. The association of insurance regulators proposes to act as an unaccredited national authority, which can negotiate with foreign lands. Those who expect the NAIC or Congress to find a quick resolution to this reinsurance debate should not take comfort in history. The NAIC has had this issue on its agenda for five years.
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