NAMIC moving to promote SAFE-T. (National Association of Mutual Insurance Companies' Solvency and Financial Enforcement Trusts)

National Underwriter Property & Casualty-Risk & Benefits Management, February, 1993 by Brostoff, Steven

WASHINGTON - The National Association of Mutual Insurance Companies has embarked on a major initiative to promote SAFE-T as a better solvency enforcement tool than either risk-based capital requirements or federal regulation. SAFE-T, which stands for Solvency and Financial Enforcement Trusts, would require insurance companies to place enough high-quality assets in a custodial account to cover 100 percent of anticipated losses and loss adjustment expenses.

State regulators would be required to take action against any insurer whose custodial account falls to 80 percent of the requirement. SAFE-T was originally developed by Bloomington, Ill.-based State Farm. Larry Forrester, president of the Indianapolis-based NAMIC, said in an interview that his board...

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