National Association of Insurance Commissioners (NAIC) 2012 Summer National Meeting Preview; Flood Insurance Reform Summit, Lender-Placed Insurance Public Hearings Scheduled

While no model laws under current development are expected to be approved by the National Association of Insurance Commissioners (“NAIC”) during its upcoming 2012 Summer National Meeting, the organization’s various committees, working groups and task forces will convene and review their respective charges.  The event runs from August 11-14 in Atlanta, Georgia.

Two public hearings are scheduled in conjunction with the event, the first of which will be held on August 9 from 1:00 p.m. to 5:00 p.m. and afford an opportunity to NAIC members and interested parties to provide insight on lender-placed insurance markets.

The second hearing, the “Flood Insurance Reform Summit,” will be hosted on August 14 from 1:00 p.m. to 4:30 p.m. by the NAIC’s Center for Insurance Policy and Research.  The Summit will feature flood insurance-related discussions and presentations from various industry, regulatory and research perspectives.  It will also serve to facilitate discussion of alternatives to the National Flood Insurance Program for consideration by policymakers.

To view the complete meeting preview, click here. 

Some agenda highlights are listed below:

• The NAIC’s Executive Committee and Internal Administration Subcommittee will consider amendments to the Business Transacted with Producer Controlled Property/Casualty Insurer Act (#325), which the Property and Casualty Insurance Committee may amend to be applicable to risk retention groups.
• The Producer Licensing Task Force will discuss the development of a national study guide for life insurance producer examinations.
• The Speed to Market Task Force will hold a public hearing on the issue of leveraging the NAIC’s System for Electronic Rate and Form Filing (SERFF) to support public access to product filings, pursuant to individual state law.
• The Auto Insurance Study Group will discuss the status of its work plan to create a resource of policy options on low-income households and the auto insurance marketplace.
• The Transparency and Readability of Consumer Information Working Group will discuss how to implement the Homeowners Insurance Consumer Shopping Guide.
• The Surplus Lines Task Force will deliberate two letters from industry groups that cite the need to promote greater uniformity among states with regard to surplus lines eligibility requirements.  The Task Force also will consider a surplus lines eligibility survey developed by the National Treatment and Coordination Working Group.
• The Workers’ Compensation Task Force will receive information on the current state of the standard and assigned risk workers’ compensation markets, including recent pricing trends.  The Task Force will review the Prime Tanning bankruptcy and the implications this case has for self-insured workers’ compensation.
• The Market Regulation and Consumer Affairs Committee will hold a policy discussion about ways to enhance state market regulation.  A preliminary list of potential topics include reporting of state market conduct data to NAIC systems, the growing role of market analysis and the most cost-efficient way to evaluate the marketplace, examiner training and expertise, examination expenses, and mandatory coordination of state examinations.
• The Own Risk and Solvency Assessment (“ORSA”) Subgroup will discuss a summary of results and recommendations from the ORSA Feedback Pilot Project, as well as an educational program on enterprise risk management.  Comments on the draft glossary for the ORSA Guidance Manual will also be reviewed.
• The Examination Oversight Task Force will provide an update on states’ adoption of the revised Model Regulation to Define Standards and Commissioner’s Authority for Companies Deemed to be in Hazardous Financial Condition (#385).  The Task Force also will discuss recommended examiner compensation for 2013.
• The Receivership and Insolvency Task Force will continue discussions on a limited exemption to the prohibition on advertising for guaranty fund coverage for qualified retirement plans (ERISA plan products).
• The Reinsurance Task Force will receive updates on efforts to implement the revised Credit for Reinsurance Model Law (#785) and Credit for Reinsurance Model Regulation (#786).  This will include an update from the Qualified Jurisdiction Drafting Group on its efforts to develop a process to: 1) review non-U.S. jurisdictions, including consideration of budgetary and resource requirements; 2) determine which jurisdictions will be reviewed initially; and 3) develop an implementation timeline. The Reinsurance Financial Analysis Working Group Drafting Group will provide an update on its efforts to develop the processes applicable to this new NAIC group, which is intended to provide advisory support and assistance to the states in the review of reinsurance collateral reduction applications.  The Task Force will discuss draft instructions for Form CR-F and Form CR-S applicable to certified reinsurers under the revised Model #785 and Model #786.
• The Risk Retention Group Task Force will receive a status report on the referral related to the risk-based capital accreditation standard, as well as discuss the increased use of surplus notes for initial capitalization in lieu of letters of credit.  The Task Force will also contemplate the formation of risk retention groups by traditional medical malpractice insurers to provide an option for policyholders.
• The Corporate Governance Working Group will discuss and consider offering proposed enhancements to U.S. corporate governance principles for public comment.
• The Group Solvency Issues Working Group will discuss studying the need to require a common group consolidated financial statement.
• The Valuation of Securities Task Force will consider adopting an amendment to modernize classification methodology, which is used to identify securities with terms that permit an obligor to pay less than the original principal when potential loss is not related to the issuer’s credit quality.  Under the proposed amendment, the NAIC’s Securities Valuation Office would implement classification decisions by notching the issuer’s credit quality, instead of assigning it to a different reporting category as is currently done.
• The Financial Regulation Standards and Accreditation Committee will consider an additional comment period for the addition of the Model Risk Retention Act (#705) to the Part A standards and the 2011 revisions to the Risk-Based Capital for Insurers Model Act (#312).  Members also will discuss the required filing deadlines for documents required by new or revised Part A standards.
• The NAIC/Consumer Liaison Committee will discuss the Texas Office of Public Insurance Counsel’s property and casualty study, along with considering the possibility of improving market regulation through transparency of data.

For complete 2012 Summer National Meeting information, click here.

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