Members of a National Association of Insurance Commissioners panel today heard comments about a capital and surplus rules change proposal and decided to recommend adoption of most of it.
The Capital and Surplus Relief Working Group at the NAIC, Kansas City, Mo., convened in Washington to consider a package of 9 revisions recommeded by the American Council of Life Insurers, Washington.
The ACLI and other advocates of the proposal say it would modernize overly conservative restrictions on use of life insurers’ surplus and capital and allow them to make more efficient use of cash at a time when liquidity is especially important.
Critics of the proposal, including leaders of the National Conference of Insurance Legislators, Troy, N.Y., argue that the recommendations would relax the current capital and surplus rules, and this is the wrong time to be easing financial services company regulatory requirements.
Members of the capital and surplus working group voted to endorse 6 of the 9 components of the ACLI proposal, including a recommendation that the NAIC speed up adoption of Actuarial Guideline VACARVM, which would increase the flexibility of variable annuity reserving requirements, and a deferred tax asset proposal.
The working group decided to endorse the deferred tax asset recommendation with an amendment proposed by Wisconsin. The Wisconsin amendment would prevent insurers from using their surplus to pay dividends to stockholders.
The working group rejected a recommendation that the NAIC waive a requirement mandating use of a grim standard scenario in calculations of minimum capital levels.
The NAIC schedule calls for the plenary, the body that represents all voting members of the NAIC, to vote on the ACLI proposal Thursday.