State insurance regulators are issuing new rules on the kind of controversial transaction that recently prompted the retirement of Maurice R. "Hank" Greenberg, chief executive of American International Group Inc., one of the world’s biggest sellers of property-casualty insurance.

The regulators hope to prepare disclosure and accounting rules for a nontraditional type of insurance known as "finite risk," which makes elements of insurance and financing tougher. Regulators state that some policies, mainly purchased by insurance companies themselves, are something more than loans in disguise.
They aim at introducing new rules by the time insurers complete their detailed annual financial statements with state regulators in March 2006, according to Howard Mills, acting superintendent of the New York State Insurance Department. Mr. Mills presides obver the committee of state insurance commissioners elaborating the changes.

The move by the National Association of Insurance Commissioners comes at a time when the country’s decentralized system of insurance regulation by states is being examined.

NAIC makes a draft of "model insurance laws" for the states and oversees accounting rules for insurance companies’ state regulatory filings, which does not coincide with the accounting applied by publicly traded companies in their federal filings.

The NAIC committee run by Mr. Mills may issue a recommendation for insurers to divide complex transactions into their component parts, separating true risk transfer from more loan-like features, according to New York Insurance Department officials.