The year is just started and already regulators, legislators and insurers have a ‘to-do list’ that would exhaust even the hyperactive.
Projects that state insurance commissioners and state legislators will be looking at are local and global, financial and market conduct driven, forward looking and yet grounded in issues of current import.
And high on that priority list will be continued efforts to maintain state authority over the regulation of insurance.
The focus on preserving state oversight was evident in recent remarks from state Senator James Seward, R-Oneonta, N.Y., when, as the newly elected president of the National Conference of Insurance Legislators, he commended state legislative groups for their opposition to federal insurance chartering.
In his statement, Seward said, “Next year it will be more important than ever for state officials, including governors, attorneys general, insurance commissioners, and legislators, to work in unison to safeguard our regulatory authority to protect our consumers and businesses. The business of insurance provides millions of jobs to our constituents and is a top five revenue source in every state across our nation.”
Another issue that will continue to be discussed in the coming year is readjusting current capital and reserving requirements.
At the end of 2008, state insurance regulators were considering a proposal to relax capital and surplus requirements. That proposal, requested by the American Council of Life Insurers, Washington, was still receiving comment at press time.
One argument for the proposal was that it was just advancing work already being done on the principles-based reserving system currently under development at the National Association of Insurance Commissioners, Kansas City, Mo.
In 2009, the new Standard Valuation Law will be completed and could move up through the NAIC in March or June, says Donna Claire, who is spearheading the effort by the American Academy of Actuaries, Washington. She says the new SVL will move in tandem with a Valuation Manual so that the 75% of states needed to adopt principles-based reserving will be able to adopt a uniform product starting in 2010.
The next piece of the project will be lining up nonforfeiture guidelines with PBR and incorporating annuities into the new reserving approach, she says.
“We are closing in on finishing the 2 big pieces, the SVL and accompanying manual which should be completed in March,” says Tom Hampton, insurance commissioner for the District of Columbia and chair of the NAIC group coordinating the PBR effort. Chapters on variable annuities, life and term products will hopefully be added around June, he adds.
The intent, he says, is to have the project up and running in the states by 2010. As part of that effort, he continues, training modules are being developed for regulatory actuaries and their financial teams in state insurance departments.
A statistical agent to collect data for a standard reserve-setting benchmark still needs to be developed, he says, explaining that the statistical agent would perform a function similar to the Insurance Services Office, Jersey City, N.J.
Hampton also says he believes that going forward, there has to be a new way in which insurance regulators can work with other regulators so there is a more holistic, transparent way to examine companies. “Right now the system doesn’t allow that to happen,” he notes.
NAIC President and New Hampshire Commissioner Roger Sevigny says in 2009 the NAIC will build its Washington office by moving its executive vice president and CEO to the capital and augmenting staff and by offering data through an Office of Insurance Information that the NAIC has at the ready to members of Congress.
Data will be another issue NAIC looks at in 2009 as it continues work on the Market Conduct Annual Statement project, he says.
The NAIC may also be able to provide expertise and assistance with health issues but will first await and see what President-elect Barack Obama’s plan entails, he says.
Another issue Sevigny says the NAIC will be working on is advancing the producer licensing process.
In addition, he says, the new NAIC leadership is weighing the potential development of a rating agency.
Sandy Praeger, NAIC immediate past president and Kansas insurance commissioner, says that going forward, the issue of an optional federal charter remains one that state insurance regulators and legislators face. Consequently, regulatory modernization efforts and the creation of an NAIC office of insurance information will be important, she adds.
Two other projects she mentions are the development of confidentiality guidelines associated with a market conduct annual statement project and the development of a rating agency plan to file with the Securities and Exchange Commission in Washington.
Sean Dilweg, Wisconsin insurance commissioner and vice chair of the NAIC Life & Annuities “A” Committee, says more work needs to be done on a new suitability model to complement work already done on issues including establishing guidelines for senior designations.
Among the health issues he says regulators will need to work on in 2009 is developing a framework to implement new mental health parity legislation.
LICONY held its annual meeting in Cooperstown earlier this month.
Fisher says his remarks were taken out of context.
Club Vita has posted a link that pension plan participants can use to cyberstalk the Angel of Death.
Sponsored by Smarsh
Many companies today are making the move to Office 365. Find out whether it’s the right move for your firm.
Sponsored by Orion Advisor Technology
Virtually all advisors want to grow their business. But consistent growth requires the right technology and strategies; otherwise, the challenges that accompany growth can leave your business paralyzed.
Don’t miss crucial news and insights you need to make informed investment advisory decisions. Join ThinkAdvisor.com now!
- Free unlimited access to ThinkAdvisor.com which provides advisors, like you, with comprehensive coverage of the products, services and trends necessary to guide your clients in making critical wealth, health and life decisions.
- Exclusive discounts on ALM and ThinkAdvisor events.
- Access to other award-winning ALM websites including TreasuryandRisk.com and Law.com.
Copyright © 2019 ALM Media Properties, LLC. All Rights Reserved.