NAIC Broadens Securities Exemptions

The streamlining efforts are part of an overall effort at the NAIC to make regulatory oversight more efficient.

Insurance representatives said the second phase of securities exemptions was a positive move.

“We are very supportive of the New York departments proposal. Clearly, it demonstrates that the SVO has been echoing the work of rating agencies,” says Doug Barnert, president of Barnert International, New York. It will help reduce cost and create efficiency, he adds. According to Barnert, a company still has to get a rating agency to sign off on the security.

Additionally, he says, most states have laws that limit the amount of lower rated securities that an insurer may hold.

A representative for a large life insurer expressed support for the elimination of efforts that he said duplicated the work of rating agencies.

The work has received support from major trade groups including the American Council of Life Insurers, the National Association of Independent Insurers and the National Association of Mutual Insurance Companies.

Reproduced from National Underwriter Life & Health/Financial Services Edition, December 12, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.