Among the issues the American Council of Life Insurers says it will be monitoring when regulators meet shortly for the fall meeting of the National Association of Insurance Commissioners are principle-based reserving, hybrid securities and changes to viatical settlement regulation.
Regarding amending the Viatical Settlements Model Act and Regulation, Michael Lovendusky, ACLI associate general counsel, said there are two areas where there is divergence among interested parties. These are the definition of viatical settlements and Section 10 of the model that addresses prohibited practices. The ACLI would like to broadly define viatical settlements to include all practices and would like a two-year limitation on settlement of contracts after issuance, he says.
During a public hearing in July, North Dakota Commissioner Jim Poolman mentioned potential wording regarding a 5-year prohibition on settlement of life insurance contracts. ACLI is waiting to see if that wording will be available for the fall meeting and could have further comment at that point, Lovendusky says.
ACLI will also weigh in on travel insurance during a public hearing on the issue, particularly in light of outbursts of world violence, according to Lovendusky.
“ACLI supports existing and proposed state laws that track the NAIC Model Unfair Trade Practices Act and prohibit unfair underwriting actions, including those that might be taken on the basis of travel,” Whit Cornman, an ACLI spokesperson said in a statement. “ACLI would have concerns about any proposed legislation or regulation that would limit life insurers’ ability to treat their existing and prospective customers fairly and to classify risks in a financially prudent manner.”
A discussion among regulators on treatment of hybrid securities for risk-based capital requirements is a matter that ACLI will be monitoring, says Linda Lanam, ACLI vice president-annuities and market regulation.
ACLI will also continue to track market conduct initiatives being advanced by regulators, she says.
Among the discussions ACLI will follow are those on changes to the market conduct annual statement, uniform definitions of market conduct complaints and new standards for the market regulation handbook of the NAIC’s market conduct uniformity working group.
On the issue of market conduct data collection, Lanam says that either later in the year or early in 2007, insurers will enter into a discussion on whether all of the data being provided is useful to regulators and for what purpose.
There could be discussion over which entity will be a primary handler of data, she adds, and going forward, a single call letter will be sent to companies rather than a letter from each of 22 participating states.