NAIC Summer 2009 National Meeting Preview

 

The National Association of Insurance Commissioners (“NAIC”) Summer 2009 National Meeting is scheduled to be held from June 13-16, 2009, in Minneapolis.  Major property and casualty, as well as life and health insurance-related issues on the meeting agenda are outlined below.

To view the complete Summer 2009 National Meeting preview, click here.  To view the tentative meeting schedule, click here.

To access the NAIC Model Law Index in reference to the Model Law numbers given in parentheses below, click here.

Note:  The NAIC has advised there is a new schedule for the Life and Health Actuarial Task Force meetings in Minneapolis:  Thursday, June 11–8:00am – 5:00pm and Friday June 12, 8:00am – 5:00pm.

 

PROPERTY AND CASUALTY

 

Information Systems Task Force

The Information Systems Task Force will discuss:

• Creation of a national catastrophe model system and proof-of-concept study to build a national multi-peril mode; and 
• Support of the existing state-developed Market Conduct Annual Statement.

 

Producer Licensing Task Force

The Producer Licensing Task Force will consider:

• Adoption of its National Association of Registered Agents and Brokers Working Group’s recommendation regarding an updated framework for determining continued compliance by states of producer licensing reciprocity requirements under the Gramm-Leach-Bliley Act (“GLBA”); and
• Whether specific requirements imposed on non-resident producers are inconsistent with the reciprocity requirements of GLBA.

 

Property and Casualty Insurance Committee

The Property and Casualty Insurance Committee is scheduled to:

• Discuss development of a public catastrophe computer model feasibility study.
• Discuss how to proceed with evaluation of a contract certainty proposal, similar to that developed by the New York State Insurance Department and concerns expressed by the reinsurance industry.
• Discuss negotiations regarding ACORD Form 28 (a proof-of-insurance form for commercial policyholders).  The contract certainty issue and ACORD issue are interrelated as they both deal with providing the business and lien-holders with certainty regarding the coverages supplied by the insurer to the policyholder.  Mortgage lenders have been concerned about changes to ACORD Form 28 that make it less helpful than prior versions of the form.
• Discuss adoption of the revised Natural Catastrophe Risk: Creating a Comprehensive National Plan white paper will be considered.  Comments from regulators are due May 31, 2009, and will be incorporated into the white paper shortly thereafter.  To view the most recent draft, click here.
• Receive a referral from the Receivership and Insolvency Task Force to review and provide advice on contract language appearing in a policy providing professional liability coverage for directors and officers will be discussed. The policy contains an exclusion of coverage for any claim made by a regulatory agency or any guaranty or insolvency fund.  The Task Force is concerned the policy language is inconsistent with sound public policy and, if it were to become widespread, would diminish the assets available to guaranty funds for the protection of policyholders and claimants.
• Receive a report from the Surplus Lines Task Force on the progress made during its January 28, 2009 conference call and the formation of a Working Group to study the feasibility of establishing a clearing house for allocating multi-state surplus lines premium taxes.

 

Catastrophe Insurance  Working Group

The Catastrophe Insurance Working Group is scheduled to:

• Discuss provisions of the Catastrophe Obligation Guarantee Act (S. 886 of 2009);
• Receive a presentation on Flood Insurance Rate Maps; and
• Hear from consumer representatives regarding coordinating and maximizing insurance funding for catastrophe loss recovery.

 

Market Regulation and Consumer Affairs Committee

The Market Regulation and Consumer Affairs Committee is scheduled to:

• Discuss centralized data collection of the Market Conduct Annual Statement and policy considerations surrounding market regulation accreditation; and
• Hold a joint hearing with the Property and Casualty Insurance Committee to discuss policy considerations for credit-based insurance scores.

 

Examination Oversight Task Force

The Examination Oversight Task Force will discuss:

• Progress on its charges, including discussions by the recently-formed Financial Examiners Coordination Working Group; and
• Receive an update on states’ adoption of the recently updated NAIC Model #385–Hazardous Financial Condition Model Regulation.

 

Reinsurance Task Force

The Reinsurance Task Force will discuss draft federal legislation and other implementation considerations of the Reinsurance Regulatory Modernization Framework. 

 

Financial Regulation Standards and Accreditation Committee

The Financial Regulation Standards and Accreditation Committee is scheduled to:

• Discuss comments received on recent revisions to the Model Regulation to Define Standards and Commissioner’s Authority for Companies Deemed to be in a Hazardous Financial Condition (#385);
• Consider adoption of models for which a one-year exposure period ended as of December 31, 2008, including the Insurer Receivership Model Act, the Risk-Based Capital for Insurers Model Act, and the Annual Financial Reporting Model Regulation; and
• Consider and vote on proposed company licensing accreditation standard comments.

 

International Insurance Relations Committee

The International Insurance Relations Committee will discuss the International Association of Insurance Supervisors (“IAIS”) strategic planning initiative, which includes:

• New work on the supervision of internationally-active insurance groups;
• The “role and structure” of the IAIS in global insurance standard setting; and
• IAIS response to the current financial market situation, which could include the IAIS taking an increased role in establishing macro-prudential oversight and coordinating supervisory colleges for insurance supervisors.

The Committee will receive reports on the following:

• The Joint Forum’s work on off-balance sheet items, risk concentrations, aggregations and modeling;
• An overview of “regulatory gaps” among financial sectors;
• NAIC response to the Financial Stability Forum’s request for “supervisory colleges” to be established for major United States insurance conglomerates; and
• The NAIC’s coordination with the insurance sector as to the Financial Sector Assessment Program, which the International Monetary Fund will conduct on the entire U.S. financial system in 2009-2010.

The Committee also will discuss the IAIS tri-annual meeting in late June and possible meetings on-site with the host regulators from Taiwan regarding an agreement on regulatory cooperation.

NAIC/Consumer Liaison Committee

The NAIC/Consumer Liaison Committee will discuss:

• Credit-based insurance scores; and
• A national catastrophe policy.

 

NAIC/Industry Liaison Committee

The NAIC/Industry Liaison Committee will discuss current issues of concern to the insurance industry and the industry trade organizations, including:

• The collection of market conduct annual statement data (“MCAS”) and the transition of the MCAS process to the NAIC during 2008-2009;
• The use of credit scoring and credit information in insurance;
• The NAIC Natural Catastrophe Model System Analysis;
• Disaster reporting; and
• Insurance company capital reserve requirements.

 

NAIC/State Government Liaison Committee

The NAIC/State Government Liaison Committee is scheduled to:

• Receive an update from the NAIC on important regulatory initiatives and emerging federal issues, such as a systemic risk regulator and resolution authority;and
• Discuss the Interstate Insurance Product Regulation Compact, the Market Conduct Annual Statement activity, and credit-based insurance scores.

 

LIFE AND HEALTH

 

Life Insurance and Annuities Committee

The Life Insurance and Annuities Committee is scheduled to:

• Receive updates from the Indexed Annuities Working Group on its December 1, 2008 nationwide data call to obtain additional details on sales and marketing practices of insurance companies that sell indexed annuities;
• Receive updates from the Consumer Guides Subgroup on its progress for revising the Annuity Buyer’s Guide;
• Receive updates from the Annuity Disclosure Working Group regarding its discussions on:
  • Revisions to the Annuity Disclosure Model Regulation, which includes adding a new disclosure for guaranty fund coverage; and
  • The use of illustrations in the sale and solicitation of fixed annuities and review its proposed annuity illustration guidelines on the subject.
• Receive updates from the Suitability of Annuity Sales Working Group, which will meet to continue its work on proposed revisions to the NAIC Suitability in Annuity Transactions Model Regulation.

 

Health Insurance and Managed Care Committee

The Health Insurance and Managed Care Committee is scheduled to:

• Receive updates from the Regulatory Framework Task Force, which is scheduled to discuss finalization of the survey instrument to be used in obtaining information from companies and state insurance departments concerning rescission and preexisting condition exclusion determinations.  The survey data will be used to develop an informational paper on these issues.  Other items to be discussed include:
  • Initial draft of revisions to NAIC models related to provisions contained in the Genetic Information and Nondiscrimination Act of 2008 (“GINA”) and State Children’s Health Insurance Plan (“SCHIP”) special enrollment provisions.
• Receive updates from the Senior Issues Task Force, which will discuss its progress on the Medigap plan and benefit changes.  Other items to be discussed include:
  • Updates from Centers of Medicare and Medicaid Services (“CMS”) representatives including an update on the information-sharing Memorandum of Understanding (“MOU”) between the NAIC and CMS; and
  • An update on implementation of the Long-Term Care Insurance Partnership Program.  The Long-Term Care External Review Subgroup will present an update on its progress in revising the NAIC’s Long-Term Care Insurance Model Regulation to provide for an external review of long-term care insurance benefits trigger determinations.

 

Life and Health Actuarial Task Force

The Life and Health Actuarial Task Force is scheduled to:

• Consider adoption of modifications to the Standard Valuation Model Law (#820), which will allow principle-based reserving methodology to be used;
• Consider authorization of the valuation manual;
• Discuss various sections of the valuation manual, especially VM-20, which relates to the requirements for principle-based reserves on life insurance products;
• Discuss a net premium reserve method to be added to VM-20; and
• Receive an update from the Accident and Health Working Group, which will discuss modifications to the Medicare Supplement refund formula and closed blocks of Long-Term Care insurance policies.

 

Interstate Insurance Product Regulation Commission (“IIPRC”)

The IIPRC and its Management Committee are scheduled to:

• Hold a public hearing to receive comments on structured settlement amendments to the Individual Immediate Non-Variable Annuity Contract Standards and amendments to the Operating Procedure for the Filing and Approval of Product Filings.  The structured settlement amendments also will be considered for adoption.

 

Should you have any questions or comments, please contact Colodny Fass.

 

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