NAIC Winter 2008 Meeting Committee Summary Reports

The National Association of Insurance Commissioners (“NAIC”) Winter 2008 National Meeting was held from December 5-8 in Grapevine, Texas.

In addition to the summaries listed below, reports on the Committee meetings held during that time may be viewed by clicking here.

Supplemental materials distributed in advance of Committee meetings also are included below for your review.

The next NAIC National Meeting is scheduled to be held from March 15-18, 2009 in San Diego, California.

 

Should you have any questions or comments, please do not hesitate to contact Colodny Fass.

 

Joint Executive Committee/Plenary

The NAIC Joint Executive Committee met on December 7 and reviewed the 2009 NAIC Budget, various Committee reports and status reports on the state implementation efforts of NAIC-Adopted Model Laws and Regulations, among other agenda items.  To view the complete meeting agenda and materials, click on the hyperlink below:

• Meeting Agenda and Materials

NAIC Zone Officer elections were announced as follows: 

• Northeastern Zone Officers: Commissioner Goldman (NJ) as Chair; Commissioner Sullivan (CT) as Vice Chair; and Commissioner Ario (PA) as Secretary
• Midwestern Zone Officers: Commissioner Holland (OK) as Chair; Commissioner Dilweg (WI) as Vice-Chair; and Director Scheiber (SD) as Secretary
• Southeastern Zone Officers: Director Richardson (SC) as Chair; Commissioner Newman (TN) as Vice Chair; and Commissioner Donelon (LA) as Secretary
• Western Zone Officers: Director Hall (AK) as Chair; Commissioner Michie (UT) as Vice Chair and Superintendent Chavez (NM) as Secretary

 

Capital & Surplus Relief Working Group

The Capital and Surplus Relief Working Group was organized to quickly consider the need and appropriateness for changes to existing NAIC solvency framework components that impact statutory capital and surplus requirements, as well as to provide any recommended changes, to the Executive Committee.

The following items were released by the Working Group for comment:

• Grid of American Council of Life Insurers (“ACLI”) Request Items Regarding the Commissioners’ Discretionary Authority on Collateral
• Technical Group Responses (includes responses provided at the December 5, 2008 meeting)

 

Climate Change and Global Warming Task Force

The Climate Change and Global Warming Task Force met on December 5.  During the meeting, the Task Force released the November 26, 2008 draft of the Climate Risk Disclosure Survey for comment.

To view the November 26 draft of the Insurer Climate Risk Disclosure Survey, click here.

To view the proposed charges for 2009 of the Climate Change and Global Warming Task Force, click here.

 

Suitability of Annuity Sales Working Group of the Life Insurance and Annuities Committee

The Suitability of Annuity Sales Working Group met on December 5 and received comments on the recently released discussion draft of the Suitability in Annuity Transactions Model Regulation.  

To view the November 14 draft revisions to Model Regulation 275:  Suitability in Annuity Transactions, click here.  To view a summary outline of the proposed revisions, click here.

 

Regulatory Framework Task Force of the Health Insurance and Managed Care Committee

The Regulatory Framework Task Force met on December 6 and distributed a discussion draft of a survey to companies concerning policy rescissions and pre-existing condition exclusion decisions. 

To view the NAIC Company Rescission and Pre-existing Condition Exclusion Survey Questions (“Survey”), click here.  Comments on the Survey are due to the Task Force no later than January 15, 2009.

The results from this survey are necessary for the Task Force to finalize its analysis of these issues and prepare an informational paper on its findings and recommendations by June 2009.

 

Life and Health Actuarial Task Force; Accident and Health Working Group

The Life and Health Actuarial Task Force met on December 4 and 5 and released the following items for comment:

• Standard Valuation Law
• VM-20: Requirements for Principles-Based Reserves for Life Products
• VM-30: Actuarial Opinion and Memorandum Requirements
• Standard Nonforfeiture Law for Life Insurance

The Accident and Health Working Group of the Life and Health Actuarial Task Force met on December 5 and discussed resources to be utilized in updating the refund calculation in Appendix A of the Model Regulation to Implement the NAIC Medicare Supplement Minimum Standards Model Act.  The project to revise the Medicare Supplement Compliance Manual also was discussed.

 

Property and Casualty Insurance Committee

The Property and Casualty Insurance Committee met on December 8 and adopted reports from its various working groups.  Information provided included:

• The Casualty Actuarial and Statistical Task Force Report:
  • Provided regulatory guidance to help appointed actuaries complete their Statements of Actuarial Opinion and the Actuarial Opinion Summaries. Comments regarding the regulatory guidance from the Casualty Actuarial and Statistical Task Force may be viewed by clicking here.
  • Included a reinsurance risk transfer letter to the Property and Casualty Reinsurance Study Group reporting on the Task Force’s 2009 risk transfer survey
• The Report on Profitability by Line by State in 2007 from the Profitability Working Group
• The Workers’ Compensation Task Force Report, including the White Paper entitled “An Overview of Workers’ Compensation Independent Contractor Regulatory Approaches.”  To view a draft of the White Paper, click here
• Chapter 25 of the Market Regulation Handbook entitled “Conducting the Advisory Organization Examination,” which may be viewed by clicking here.
• The report of the Consumer Guides Working Group, which included the White Papers “A Consumer’s Quick Guide to Homeowners Insurance” and “A Consumer’s Quick Guide to Automobile Insurance”

A motion that the NAIC reconsider its decision to defer action to implement the tax-deferred pre-event catastrophe reserve until Congress has acted to amend the IRS tax code also was adopted during the meeting.

Other items discussed included:

• A letter from New York Insurance Superintendent Eric Dinallo addressed to all insurers, reinsurers and insurance producers regarding contract certainty, which may be viewed by clicking here
• A 2007 draft report entitled “Corporate Governance Standards for Risk Retention.” To view the report, click here. Comments submitted by the Risk Retention Group Task Force may be viewed by clicking here.
• A September 3 draft of the advocacy paper entitled “Natural Catastrophe Risk:  Creating a Comprehensive National Plan” which may be viewed by clicking here. The following entities submitted comments in advance of the meeting:
  • Natural Catastrophe Subcommittee of the American Academy of Actuaries (“AAA”)
  • American Insurance Association
  • Cincinnati Insurance Companies Group
  • National Association of Mutual Insurance Companies
  • National Wildlife Foundation
  • Nebraska Department of Insurance
  • Property Casualty Insurers Association of America
  • Reinsurance Association of America
  • Wharton Risk Management and Decision Process Center, The Wharton School, University of Pennsylvania
• The workers’ compensation large deductible referral made in the October 2005 Workers’ Compensation Large Deductible Study.  To view draft changes submitted by the Large Deductible Study Implementation Working Group, click here.
• Revisions to the Guideline for Implementation of Medical Professional Liability Closed Claim Reporting, including: suggested regulation or reporting requirements; a mechanism for reporting and collecting data; insurance department outreach efforts; and details about compiling, verifying, and releasing data.  To view the revised Guideline draft dated December 3, click here.

 

Reinsurance Task Force

The Reinsurance Task Force met on December 5.  To view the meeting agenda and supplemental materials, click here.

Among the items discussed were the following:

• The Guidance Paper on the Mutual Recognition of Reinsurance Supervision from the International Association of Insurance Supervisors (“IAIS”)
• A presentation regarding the Model Credit for Reinsurance Law from an interested party

The Model Credit for Reinsurance Law presentation addressed the $20 million minimum surplus requirement that applies to an assuming insurer who transacts creditable reinsurance in the U.S. through maintenance of a multi-beneficiary trust to secure its reinsurance obligations to U.S. ceding companies.

The presentation included a proposal to modify this requirement by amending the Model to grant Insurance Commissioners the sole discretion to allow an assuming insurer to maintain less than $20 million in surplus subsequent to such assuming insurer entering into run-off.  The presentation can be viewed on pages 3-10 of the supplemental meeting materials packet here.

The Task Force took no action on the proposed amendment and will consider discussion at a future meeting.

 

Life Risk-Based Capital Working Group

The Life Risk-Based Capital Working Group met on December 4 and approved the 2008 Life Risk-Based Capital Instructions and response to the Capital and Surplus Relief Working Group.  To view the meeting agenda and supplemental materials, click here.

During this meeting, the Life Risk-Based Capital Working Group also discussed the following:

• A report provided by the AAA’s Economic Scenario Working Group regarding a scenario generator for all principles-based calculations
• An updated C-3 Phase III Report from the AAA regarding the working reserve

 

Receivership and Insolvency Task Force

The Receivership and Insolvency Task Force met on December 6 and took the following actions:

• Adopted the revised Life and Health Insurance Guaranty Association Model Act
• Adopted optional language for assumed business, within the proposed Property and Casualty Insurance Guaranty Association Model Act before the Financial Condition Committee
• Adopted revisions to the Receiver’s Handbook on Insurance Company Insolvencies
• Approved a survey to be submitted by NAIC Staff to receivers regarding Uniform Data Standards
• Formed an Advisory Group of regulators and interested parties to identify critical elements that the Task Force can urge states to uniformly adopt
• Directed NAIC Staff to update the NAIC Directory of Resources to Assist Receivers of Insolvent Insurance Companies
• Directed NAIC Staff to collect certain information from receivers on reinsurance recoverables

To view the meeting agenda and supplemental meeting materials, click here.

 

International Solvency and Accounting Working Group of the Financial Condition Committee

The International Solvency and Accounting Working Group of the Financial Condition Committee met on December 6 and voted to expose the Non-Accounting Issues for Consideration in the Solvency Modernization Initiative draft for comments until February 4, 2009.  To view a copy of the draft, click here. 

To view the IAIS Solvency Subcommittee meeting report, click here. 

To view an update on IASB and FASB matters, click here.

Other items discussed during the meeting included:

• Comparison Chart of Solvency Systems: US and EU
  • To view comments provided by the ACLI regarding its processes, click here
  • To view comments provided by the CEA Insurers of Europe in support of the chart, click here
  • To view comments provided by the Group of North American Insurance Enterprises encouraging further examinations, click here

 

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