National Association of Insurance Commissioners (NAIC) Fall 2013 National Meeting Preview

 

The National Association of Insurance Commissioners’ (“NAIC”) Fall 2013 National Meeting is scheduled for December 15-18 at the Washington Marriott Wardman Park Hotel in Washington D.C.

For more information, including the complete meeting preview, click here.

Some highlights of the event are below:

 

Special Meetings and Events

• European Union-United States Dialogue Project:  Supervisory Colleges Best Practices Forum (December 14)

• NAIC Center for Insurance Policy and Research (“CIPR”) Event:  The Future of Automobile Insurance–Telematics in the U.S. (December 16)  This event will feature discussions on usage-based insurance, telematics data standards and market drivers, as well as a panel discussion from an assortment of perspectives, including federal, state, industry and consumer.  Presenters will include representatives from the U.S. Department of Transportation, Towers Watson, ACORD, Center for Economic Justice, Strategy Analytics and the Maryland Insurance Administration.

 

Executive Committee and Plenary

Among the items to be considered by the Executive Committee and Plenary will be:

• Proposed NAIC committee charges for 2014
• Amendments to the Standard Nonforfeiture Law for Life Insurance (#808)
• The Consumer Shopping Tool for Auto Insurance
• The Insurance Department Investigator Safety Guideline
• Approval of conditional qualified jurisdictions from the Reinsurance Task Force
• The U.S. National State-Based System of Insurance Financial Regulation and the Solvency Modernization Initiative white paper
• 2010 revisions to the Insurance Holding Company System Regulatory Act (#440) and the Insurance Holding Company System Model Regulation (#450) for accreditation purposes
• A one-year comment period for the Risk Management and Own Risk Solvency Assessment Model Act (#505)

Progress reports will be provided on the states’ implementation efforts on the following NAIC-adopted model laws, regulations and/or amendments, including:

• Business Transacted with Producer Controlled Property/Casualty Insurer Act (#325)
• Insurance Holding Company System Regulatory Act (#440)
• Insurance Holding Company System Model Regulation with Reporting Forms and Instructions (#450)
• Credit for Reinsurance Model Law (#785) and Credit for Reinsurance Model Regulation (#786)
• Model Risk Retention Act (#705)
• Risk Management and Own Risk and Solvency Assessment Model Act (#505)

 

Principle-Based Reserving Implementation Task Force

The Principle-Based Reserving Implementation Task Force will discuss a report on captives, as well as principles-based reserving (“PBR”) impact on small companies.

• The PBR Review Working Group will discuss the development of reporting and the PBR framework for risk-focused examination of principle-based reserves, including issues related to modification of annual statement blanks and the enhancement of review procedures.

 

Life Actuarial Task Force

The Life Actuarial Task Force will discuss and consider adoption of amendments to the Valuation Manual.

• The ERISA Retirement Income Working Group anticipates continuing its discussion related to the U.S. Department of Labor annuity safe harbor rules and possible options to encourage retirement plan sponsors to offer annuities to their employees as a retirement option.
• The American Academy of Actuaries will provide a report regarding nonforfeiture modernization.
• The Joint Qualified Actuary Subgroup’s draft discussion paper regarding a uniform definition of “qualified actuary,” a definition of “inappropriate or unprofessional actuarial work” and a process for corrective action by regulators and/or professional organizations will be reviewed.

 

Property and Casualty Insurance Committee

The Property and Casualty Insurance Committee will discuss possible data collection related to lender-placed insurance.  Members will also hear a presentation from the Crash Data Group on crash data retrieval tools and an update on federal flood litigation in the case of Mississippi Insurance Department v. U.S. Department of Homeland Security et al.

• The Catastrophe Insurance Working Group will hear an update on the National Flood Insurance Program and current catastrophe legislation.
  • The Data Collection Subgroup will report on uniform catastrophe reporting form progress.
• The Transparency and Readability of Consumer Information Working Group will discuss a draft of best practices for placing insurance policies online. Continued focus will be on increased consumer accessibility to various carriers’ policy forms on a presale basis, as well as facilitating consumers’ understanding of the content of insurance policies and assess differences in insurers’ policy forms.
• The Terrorism Insurance Implementation Working Group will discuss continued steps in support of the reauthorization of the federal Terrorism Risk Insurance Act (“TRIA”).
• The Casualty Actuarial and Statistical Task Force will discuss Schedule P, loss adjustment expenses, the Insurance Regulation Information System (IRIS) ratios and the Own Risk and Solvency Assessment (ORSA).
• The Joint Qualified Actuary Subgroup will discuss comments received on its draft discussion paper on the development of a uniform definition of “qualified actuary,” as well as a definition of “inappropriate or unprofessional actuarial work” and a process for corrective action by regulators and/or professional organizations.
• The Workers’ Compensation Task Force will discuss the impact on the workers’ compensation market should TRIA not be renewed in 2014. Representatives from primary insurers, reinsurers, advisory organizations and residual markets will be invited to present information

 

Financial Condition Committee

The Financial Condition Committee will discuss and consider the NAIC process for assigning group codes, among other agenda items.

• The Emerging Actuarial Issues Working Group will discuss pending responses to current questions seeking interpretations of Actuarial Guideline XXXVIII-The Application of the Valuation of Life Insurance Policies Model Regulation (AG 38).
• The Mortgage Guaranty Insurance Working Group will discuss draft changes to the Mortgage Guaranty Insurance Model Act (#630).
• Among other agenda items, the Examination Oversight Task Force will discuss recommended examiner compensation for 2013.
• The Climate Change and Global Warming Working Group will hear a presentation from the Insurance Institute for Business and Home Safety on how building codes can be improved in the face of climate change. Members also will hear a presentation from the American Insurance Association on the challenges of insuring for floods.
• The Receivership and Insolvency Task Force will hear a federal legislative update and presentations on guaranty association coverage of factored structured settlements and life settlements.
• The Receivership Reinsurance Recoverables Working Group will discuss interest on overdue reinsurance recoverables and consider drafting a model guideline.
• The Reinsurance Task Force will hear updates on efforts toward implementation of the revised Credit for Reinsurance Model Law (#785) and the Credit for Reinsurance Model Regulation (#786). This will include states’ efforts to implement the revised models and the Task Force’s commitment to re-examine the collateral amounts. Members also may discuss a referral from the Financial Condition Committee on recommendations from the Captives and Special Purpose Vehicles white paper.
• The Risk Retention Group Task Force will consider adoption of revised language to the Reinsurance Guidelines for Risk Retention Group Licensed as Captive Insurers.
• The Corporate Governance Working Group will discuss its progress in developing a corporate governance model law, as well as revisions to incorporate an internal audit function requirement into the Annual Financial Reporting Model Regulation (#205).
• The International Solvency and Accounting Standards Working Group will consider comments on the International Accounting Standards Board (IASB) conceptual framework discussion paper. The October 16 draft of the International Association of Insurance Supervisors’ (“IAIS”) Common Framework for the Supervision of Internationally Active Insurance Groups (ComFrame) will be finalized, with comments due December 16.

 

Financial Regulation Standards and Accreditation Committee

The Financial Regulation Standards and Accreditation Committee will consider adoption of the following items:

• Proposed revisions to the Review Team Guidelines related to significant 2012 revisions to the Financial Condition Examiners Handbook
• A referral from the Corporate Governance Working Group relating to the Part A Corrective Action standard
• A referral from the Risk Retention Group Task Force related to Note 1 in the Annual Audited Financial Report
• A referral from the Group Solvency Issues Working Group related to the revisions to the Review Team Guidelines regarding the holding company analysis process
• A referral from the Financial Examiners Coordination Working Group related to uploading examination reports to the Financial Exam Electronic Tracking System.
• A referral from the Risk Retention Group Task Force related to the 2012 revisions to the Insurance Holding Company System Regulatory Act (#404) and the Insurance Holding Company System Model Regulation (#450) and the applicability to risk retention groups.

 

International Insurance Relations Committee

The International Insurance Relations Committee will discuss progress on initiatives of the IAIS, including the Common Framework for the Supervision of Internationally Active Insurance Groups (ComFrame) and, in particular, comments to be submitted as part of the public consultation and an update on the field testing phase; the newly proposed risk-based global insurance capital standard for internationally active insurance groups; and the backstop capital requirements for implementation by global systemically important insurers and the higher loss absorbency requirements for G-SIIs.  Also anticipated is a discussion of cooperative efforts with the U.S. Federal Insurance Office (FIO) on major issues, including the U.S.-EU Dialogue Project.  Reports will be given on work in progress at the Organization for Economic Cooperation and Development (OECD), Joint Forum, Financial Stability Board (FSB) and other relevant international organizations.

 

 

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