National Association of Insurance Commissioners Joint Executive Committee/Plenary Adopts Nonadmitted Insurance Multistate Agreement, Holding Company Model Regulations, Reinsurance Collateral Recommendations at December 16, 2010 Meeting

 

The National Association of Insurance Commissioners’ (“NAIC”) Joint Executive Committee/Plenary (“Plenary”) adopted the Nonadmitted Insurance Multistate Agreement (“NIMA”) along with other significant model regulations and recommendations during a December 16, 2010 teleconference.  

NIMA had been approved “in concept” by the NAIC Surplus Lines Implementation Task Force (“Task Force”)  on December 1 under the condition that it would be subject to technical or substantive amendments during a follow-up call on December 8.  The Task Force approved three amendments on December 8, and forwarded the agreement to the Plenary for adoption.

NIMA is the result of months of discussion and deliberation.  During its creation, representatives from several states expressed concerns ranging from the type of information NIMA would require insurers to provide, to confidentiality and tax issues.  A key feature of NIMA is the creation of a central clearinghouse for reporting, collecting and distributing surplus taxes; as well as uniform allocation and reporting methods to be prescribed, and preservation of the role of stamping offices.

The Plenary also adopted several other significant regulatory initiatives.  Key measures approved during meeting include the following:

• The Insurance Holding Company System Regulatory Act (#440, “Act”) and the Insurance Holding Company System Model Regulation with Reporting Forms and Instructions (#450, “Model Regulation”)

The Plenary adopted the Act and Model Regulation with little discussion.  The approved versions, the result of months of discussion and many revisions, will provide state regulators with significant new tools to evaluate risk within insurance groups.

During the meeting, some concern was raised about confidentiality and enterprise risk filing, which was addressed with an amendment to satisfy this concern.  

The Model Regulation was adopted with no changes.

• Reinsurance Collateral Reduction and Accreditation Recommendations

Adopted with no discussion, the approved recommendations were compiled based on the submission of comments from states interested in commencing individual state-based reinsurance collateral reduction reforms.  The approved changes are generally intended to conform to key elements of the NAIC Reinsurance Framework.   To view the recommendations, click here. 

Submitted comments on the documents are provided via hyperlink below:

NAIC Model 440: Insurance Holding Company System Regulatory Act (As Adopted by the NAIC Financial Condition Committee on August 5, 2010:

• Proposed Amendments to Holding Company Models
• Comments:
  • Proposed amendments: Former Nebraska Insurance Director Ann Frohman
  • ACE
  • ACLI
  • AHIP
  • AIA
  • Joint Comments (ACLI, AHIP, AIA, NAMIC, PCI, and RAA)
  • PCI – Model #440 & #450
    • PCI – Proposed revisions to Model #440
  • RAA
  • Unitrin, Inc. Comments

NAIC Model 450: Insurance Holding Company System Model Regulation With Reporting Forms and Instructions   (As Adopted by NAIC Financial Condition Committee on Aug. 5, 2010)

• Comments:
  • ACLI
  • PCI – Model #440 & #450
  • PCI – Proposed revisions to Model #450

The Plenary also adopted:

• The Rate Filing Disclosure Form
• An updated model bulletin on the use of Retained Asset Accounts
• The 2011 NAIC budget, which includes total revenues of $75.2 million and total expenses of $75.4 million
• Several health care reform items, including model language to assist states as they bring their laws into compliance with regard to early implementation provisions of federal health care reform

 

With no further business, the meeting was adjourned.

 

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