National Association of Insurance Commissioners (NAIC) Advances Key Regulatory Initiatives
Dec 17, 2014
The National Association of Insurance Commissioners (“NAIC”) adopted revisions to its Insurance Holding Company System Regulatory Act and Actuarial Guideline 48 (“AG 48”) during a teleconference meeting of the NAIC’s Executive Committee/Plenary yesterday, December 16, 2014. Seven foreign supervisory authorities were also approved as Qualified Jurisdictions.
“The adoption of these components supports our 2014 key initiatives and is the result of truly outstanding work by America’s state insurance regulators,” said Adam Hamm, NAIC President and North Dakota Insurance Commissioner. “The Revised Insurance Holding Company System Regulatory Act demonstrates our commitment to international standards, while AG 48 furthers our objectives of transparency and uniformity related to the regulation of life insurer-owned captives. The seven Qualified Jurisdictions support our ongoing efforts on reinsurance collateral reform and international coordination.”
The revised Insurance Holding Company System Regulatory Act (Model #440) has been updated to clarify the group-wide supervisor for a defined class of internationally active insurance groups. It also outlines the process for determining the lead state for domestic insurance groups, outlines the activities in which a commissioner may engage as group-wide supervisor and extends confidentiality protections to cover information received in the course of group-wide supervision.
In its adoption of AG 48, the NAIC established national standards for XXX/AXXX captive reinsurance transactions. This guidance includes regulation of the types of assets held in a backing insurer’s statutory reserve. AG 48 takes effect in 2015.
The NAIC voted for seven countries to be eligible for reinsurance collateral reduction as an approved Qualified Jurisdiction. Four of the seven jurisdictions (Bermuda, Germany, Switzerland and the United Kingdom) were previously on the NAIC’s List as Conditionally Qualified.
Effective January 1, 2015, these four (plus Japan, Ireland and France) will be fully Qualified Jurisdictions subject to re-evaluation in five years.
During yesterday’s meeting, the NAIC also adopted model regulations for individual and small group health insurance coverage and Statutory Accounting Principles (SSAP) No. 107 – Accounting for the Risk-Sharing Provisions of the Affordable Care Act.
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