National Association of Insurance Commissioners To Consider Adoption of Credit for Reinsurance Model Law and Regulation at Spring 2013 National Meeting

 

The National Association of Insurance Commissioners (“NAIC”) will hold its Spring 2013 National Meeting from April 6-9 in Houston, Texas.

Below are agenda highlights from various committees scheduled to meet during that time.

To view complete meeting details, including registration information, click here.

 

Executive Committee and Plenary

During the Joint Meeting of the Executive Committee and Plenary, members will consider adoption of the Uniform Business Entity Licensing Standards and 2011 revisions to the Credit for Reinsurance Model Law (#785) and the Credit for Reinsurance Model Regulation (#786) for accreditation purposes.  To view the meeting materials on this issue, click here.

Progress reports will be provided on states’ implementation efforts on 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)
• Model Risk Retention Act (#705)
• Risk Management and Own Risk and Solvency Assessment Model Act (#505)

 

Executive Committee

Among other agenda items, the Executive Committee will consider approving a model law development request for amendments to the Annual Financial Reporting Model Regulation (#205) and Creditor-Placed Insurance Model Act (#375).  To view the request for the latter, click here.

 

Life Actuarial Task Force

The Life Actuarial Task Force will continue its work amendments to the Valuation Manual, as well as related modification of annual statement blanks.  A working group and subgroup will be appointed to address longer term Valuation Manual projects.

The Task Force will consider questions regarding amendments to Actuarial Guideline XXXIII-Determining CARVM Reserves for Annuity Contracts with Elective Benefits (AG 33). 

At the meeting, the American Academy of Actuaries will provide a report on non-forfeiture modernization.  This will include a discussion of synthetic guaranteed investment contracts and any recommendations.

• The Joint Qualified Actuary Subgroup will discuss its charges related to developing 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.

 

Property and Casualty Insurance Committee

The Property and Casualty Insurance Committee will consider adoption of a revised Risk Retention and Purchasing Group Handbook and a Consumer Shopping Tool for Homeowners Insurance. 

The Committee also will discuss procedures and data-reporting requirements that a state could implement in advance of a catastrophe and best practices to reduce post-disaster insurance recovery obstacles for consumers.

• The Advisory Organization Examination Oversight Working Group will receive status reports from lead states on the following ongoing exams: Insurance Services Office, American Association of Insurance Services, Independent Statistical Service, National Independent Statistical Service, and Surety & Fidelity Association of America.

NAIC staff will discuss plans to update Chapter 25 of the Market Regulation Handbook.

• The Auto Insurance Study Group will discuss the status of research conducted regarding issues relating to low-income households and the auto insurance marketplace. Issues related to data collection also will be discussed.
• The Catastrophe Insurance Working Group will discuss the draft National Flood Insurance Program handbook for regulators. An update on current catastrophe legislation will include a discussion on lessons learned from Superstorm Sandy.
• The Risk Retention Working Group will discuss the status of the revised Risk Retention and Purchasing Group Handbook.
• The Transparency and Readability of Consumer Information Working Group will discuss the Automobile Insurance Consumer Shopping Guide and continue working toward completion of the guide. A presentation on legislation that has been introduced regarding contract readability also will be given.
• The Surplus Lines Task Force will receive a report by the Surplus Lines Requirements Subgroup that will offer suggestions to the states on how to achieve a more uniform approach to non-admitted insurer eligibility requirements and regulator monitoring

 

Workers’ Compensation Task Force

The Workers’ Compensation Task Force will discuss feedback received regarding the model law developed by the International Association of Industrial Accident Boards and Commissions to limit opioid abuses.  NAIC staff will report on the growth of the workers’ compensation residual market. The Task Force also will discuss opt-out legislation proposed in Oklahoma and Tennessee.

 

Financial Condition Committee

• The Mortgage Guaranty Insurance Working Group will discuss input from the industry, regulators and other interested parties on potential changes to the solvency framework for mortgage guaranty insurance.
• The Blanks Working Group will consider submitted blanks proposals for changes to the 2013 annual statement filing instructions and blanks. The changes include additional disclosures in the reinsurance schedules for certified reinsurance data.
• The Emerging Accounting Issues Working Group will consider whether to recommend to the Statutory Accounting Principles Working Group revisions that would incorporate existing interpretation guidance directly into the Statements of Statutory Accounting Principles.
• The Statutory Accounting Principles Working Group will consider proposed changes to statutory accounting principles. Other topics to be discussed include: disclosures for separate account seed money, accounting guidance for mandatory convertible securities, and revisions to title insurance loss reserves.
• The Receivership and Insolvency Task Force will discuss and consider for adoption of the draft Guideline for Stay on Termination of Netting Agreements and Qualified Financial Contracts in Section 711 of the Insurer Receivership Model Act (#555),
• The Reinsurance Task Force will receive updates regarding efforts toward implementation of the revised Credit for Reinsurance Model Law (#785) and Credit for Reinsurance Model Regulation (#786), including updates regarding the states’ efforts to implement the revised models. The Task Force will discuss the draft NAIC Process for Developing and Maintaining the List of Qualified Jurisdictions. Discussion will continue on the provisions of the federal Nonadmitted and Reinsurance Reform Act with respect to the regulation of “reinsurers.” The Task Force will also receive an update regarding international reinsurance-related issues.
• The Risk Retention Group Task Force will continue discussions on exemptions included in Section 2 of the Annual Financial Reporting Model Regulation (#205) and audit requirements related to the reconciliation for differences in accounting basis in Section 5 of Model #205. The Task Force will also receive an update on other NAIC groups’ work related to captive insurers and risk retention groups.
• The Solvency Modernization Initiative Task Force will discuss its draft white paper, entitled The U.S. National State-Based System of Insurance Financial Regulation and the Solvency Modernization Initiative.
• The Corporate Governance Working Group will finalize policy decisions regarding proposed enhancements to U.S. corporate governance principles.
• The Group Solvency Issues Working Group will discuss various issues dealing with group supervision. This includes finalizing a memorandum to the Financial Regulation Standards and Accreditation Committee regarding substantially similar accreditation requirements for the Risk Management and Own Risk and Solvency Assessment Model Act (#505) and discussion of a potential section for the Financial Analysis Handbook on group supervision.
• The Valuation of Securities Task Force will review a proposed amendment to the Purposes and Procedures Manual of the NAIC Securities Valuation Office (“SVO”) to provide reporting guidance for residential mortgage-backed securities or commercial mortgage-backed securities purchased between year-end valuations. The NAIC staff will present recommendations designed to enhance the reporting framework for mandatorily convertible securities. A report also will be given on industry comments received on definitions proposed for the “Recalibration Project,” which is focused on the development of differing frameworks (i.e., credit symbols, definitions and statistical mapping) for NAIC designations assigned to corporate, municipal and asset-backed securities.

The SVO and the American Council of Life Insurers may give a progress report on work done to assess the feasibility of an industry proposal to modify NAIC rules pertaining to the presentation of financial results by insurance companies when filing foreign securities with the SVO.  Discussion may also take place issues pertaining to the 2013 financial modeling process. A report is expected respect on working capital finance investments.

• The Financial Regulation Standards and Accreditation Committee will consider adoption of 2012 revisions to NAIC Publications Referenced in the Accreditation Standards, as well as proposed revisions to Part A: Preamble for adoption of the Risk-Based Capital (RBC) for Health Organizations Model Act (#315) and proposed revisions to Part A: CPA Audits Standard. The Committee will discuss the following items:
  • 2012 amendments to the Business Transacted with Producer Controlled Property/Casualty Insurer Act (#325), Risk Management and Own Risk Solvency Assessment Model Act (#505) as a possible addition to the Part A accreditation standards
  • Comments received related to the 2009 revisions to the Standard Valuation Law (#820)
  • Comments received related to the 2010 revisions to the Insurance Holding Company System Regulatory Act (#440) and the Insurance Holding Company System Model Regulation (#450)

 

International Insurance Relations Committee

The International Insurance Relations Committee will discuss progress on initiatives of the International Association of Insurance Supervisors (“IAIS”), including the Common Framework for the Supervision of Internationally Active Insurance Groups (ComFrame); the IAIS Insurance Core Principles; the Supervisory Forum; and the Financial Stability Committee.  The Committee also plans to discuss cooperative efforts with the U.S. Federal Insurance Office on major issues, including the U.S.-European Union Mutual Regulatory Understanding Project.  The Committee will receive reports on work in progress at the Joint Forum, the Financial Stability Board and other relevant international organizations.

 

Should you have any questions or comments, please contact Colodny Fass& Webb.

 

 

Click here to follow Colodny Fass& Webb on Twitter (@CFTLAWcom)

 

 

To unsubscribe from this newsletter, please send an email to Brooke Ellis at bellis@cftlaw.com.