Applied Underwriters Petitions NJ Regulators for Confirmation of Captive Reinsurance and its Use in its Widely Accepted Workers’ Compensation Format
The action holds that regulators have misinterpreted the longstanding, essential role that reinsurance plays in a widely used workers’ compensation insuring format and has attempted to restrict the program in direct violation of section 531 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which precludes state insurance regulators from rewriting the terms of an out-of-state reinsurance contract. The Petition requests confirmation that Applied’s program is a valid captive reinsurance arrangement under New Jersey law and should be affirmed at a time when the format’s desirability among businesses is growing as a preferred risk transfer vehicle among Applied’s many New Jersey based clients and their employees. The Petition protects the clients of independent agents who have implemented the Applied programs as a sound, wise choice, an alternative to “off the shelf” policies in which the buyer has little influence on costs and little benefit from favorable outcomes.
