At least 20 insurers have asked states for relief from the usual capital and surplus statutory accounting rules.
More insurers are seeking variations by using states’ “permitted practices” rules, officials say.
About 20 companies have applied to the Ohio Department of Insurance for relief in response to bulletins issued Feb. 3, according to Carly Glick, a department representative. Reply letters will be sent to the companies next week, Glick says.
Hartford Financial Services Group Inc., Hartford, disclosed this week that it has asked the Connecticut department for changes that will improve its financial position by $987 million. Connecticut Insurance Commissioner Thomas Sullivan has granted the changes requested.
States’ use of permitted practices rules to offer insurers capital and surplus relief may force companies to ask for relief in order to remain competitive with other companies that already have applied for relief, according to Birny Birnbaum, executive director of the Center for Economic Justice, Austin, Texas.
Birnbaum and Robert Hunter, an insurance specialist at the Consumer Federation of America, Washington, are arguing that any capital and surplus relief proposals should go through the full rulemaking process at the National Association of Insurance Commissioners, Kansas City, Mo.
In addition to creating competitive conflicts between companies, use of permitted practices in individual states could create conflicts between states, Birnbaum says.
Hunter and Birnbaum today wrote to commissioners to ask the NAIC to publish by March 1 the total number of requests for permitted practices related to capital and reserve relief for reporting year 2009.
The information should be broken out by state, by type of company and by type of relief requested, Hunter and Birnbaum write.
Hunter and Birnbaum are not asking commissioners to release the names of the insurers making the relief requests.