Life insurers are urging state regulators to change capital and surplus reporting rules in time to affect the 2008 financial statements.
State insurance commissioners reviewed a 9-point proposal from the American Council of Life Insurers, Washington, Friday, during a conference call organized by the National Association of Insurance Commissioners, Kansas City, Mo.
Commissioners decided to defer action until after a Jan. 27 public hearing.
The upcoming hearing was scheduled after critics argued that the ACLI had presented the plan in secret and that regulators were not giving consumers and others a chance to weigh in.
During the call, Thomas Hampton, the District of Columbia commissioner, and Thomas Sullivan, the Connecticut commissioner, reviewed the accounting and actuarial requests made by ACLI and the recommendations of NAIC technical working groups.
What remains uncertain is whether, following the Jan. 27 public hearing, regulators will make decisions that can be incorporated into the 2008 financial statements.
The 2008 financial statements must be filed by March 15, and work on the 2008 financials is already starting.
“Having a public hearing in late January, with no stated intention of making any decisions on at least some of changes the [Capital & Surplus] Working Group has already acknowledged are necessary and appropriate, quite frankly would be an embarrassment to the NAIC,” writes Bruce Ferguson, an ACLI senior vice president.
“If you have essentially written off making changes for 2008 reporting purposes, then why was expedited consideration given to the suggested changes in the first place, and why were at least some of the changes acknowledged to be necessary and appropriate?” Ferguson asks. “More to the point, why even hold the January hearing if timely action is not contemplated?”
Ferguson, on behalf of the ACLI, urges the NAIC to “identify those changes that can be made now and act on them.”
One such example, he writes, is a change in the rules governing deferred tax assets.
“This change provides the broadest measure of relief across the entire industry because it is not product specific, and does not carry with it the ‘optics’ of lowering reserves that appears to be driving your reluctance to move forward with this initiative,” Ferguson writes.
Ferguson asks the NAIC to evaluate proposed changes that commissioners cannot agree to support and develop alternatives that can be implemented.
“Put your members on notice that decisions will be made by a time certain, and vote the changes up or vote them down,” Ferguson writes.
Sullivan says in a statement that he is confident that the working group’s recommendations were completed expeditiously and with thoughtful consideration of that which is in the best interests of consumers and the insurance industry.
“I continue to believe that these are national issues that require a national response, and I am committed to working with my colleagues to resolve this in a manner that’s in the best interest of consumers and the industry as a whole,” Sullivan says.