Regulators will consider addressing trust settlements and insurance policy loan provisions when they discuss charges for 2008, according to Julie McPeak, chair of the Life Insurance and Annuities “A” Committee of the National Association of Insurance Commissioners and executive director of the Kentucky office of insurance.
The discussion will take place during the fall NAIC meeting next week. Charges for the coming year are usually discussed starting with the fall meeting and finalized during the winter meeting.
The issue was raised during a recent conference at which McPeak moderated a life settlements panel. A question was directed to her regarding the openness and transparency of discussions at the “A” Committee. McPeak says she responded that she believed the process was an open one, adding that one of the items up for discussion is an examination of “non-settlement settlements,” transactions such as settlement trusts and a new program proposed by an unnamed life insurer that would allow loans in excess of cash surrender value.
The insurance company proposal received a good deal of conversation during an “A” Committee conference call held on Aug. 28. The exclusion of settlement transactions used by trusts was a major point of debate prior to the adoption of changes to the Viaticial Settlements model act.
McPeak says at this point she does not have a sense if there will be sufficient support for the proposal to be a model law. However, she continues, she would like it to be a model rather than a guideline so that there would be “a level playing field” since viaticals and life settlements are addressed in a model law.
A directive from “A” Committee to its Life & Health Actuarial Task Force to begin looking at the proposal from the insurer has already been issued, McPeak says.
Other charges that she would like to see completed but which could continue into 2008 are: travel underwriting and principles-based reserving.