NAIC's 2008 Budget Sees

Another trade group, the American Insurance Association, Washington, says it supports the NAIC’s plan to add a staff person to handle matters involving the International Association of Insurance Supervisors, Basel, Switzerland, but would prefer to see the NAIC hold just 3 national meetings per year, rather than 4.

The National Association of Mutual Insurance Companies, Indianapolis, says the NAIC’s current 80% reserve is “beyond prudential and a cushion that invites expenditure without deliberation.”

NAMIC is also expressing concern about the NAIC’s interest in international activities.

There is a question about whether solvency requirements for primary insurers must be global and whether the proposed shift to principles-based regulation will merely add another layer of regulation to the mix, NAMIC officials write.

NAIC officials write in their own response that they believe the NAIC is maintaining its reserves at a prudent level and disagree with the assertion that the reserve level could be manipulated.

In addition, the NAIC says it understands the importance of cost containment and such awareness has helped the organization keep increases in operating expenses moderate.

In response to criticism of international involvement, the NAIC officials write that failure to stay involved could increase costs for U.S. insurers that operate abroad.

If U.S. regulators fail to participate in international discussions, “markets where U.S. companies are active will not be influenced by the regulatory practices that have been developed and fine-tuned over years of experience in the U.S.,” NAIC officials write.