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June 08, 2009 at 08:00 PM
Efforts to keep insurance under state jurisdiction may add drama to the upcoming National Association of Insurance Commissioners summer meeting.
The meeting, set to start June 13 in Minneapolis, will feature sessions on topics such as derivatives risk mitigation and principles-based reserving.
But Howard Mills, a former New York state insurance commissioner who is now chief advisor for the insurance group at Deloitte & Touche L.L.P., New York, says he will be especially interested in topics such as the battle between the NAIC, Kansas City, Mo., and the U.S. Securities and Exchange Commission over whether indexed annuities ought to be classified as insurance products or as securities.
“There’s a lot of background noise that makes this meeting very interesting,” Mills says.
Some insurers have sided with the NAIC and producer groups, arguing that indexed annuity returns are backed by insurers’ general account assets, and that the products should continue to be regulated by state insurance departments.
MetLife Inc., New York, has filed a brief supporting the SEC’s effort to get jurisdiction over the annuities. Indexed annuities are similar enough to variable annuities that they ought to be regulated in the same way that VA products are regulated, MetLife says.
At other insurers, “there’s a wide range of views,” Mills says. “Many have kept fairly quiet on the issue. They are happy to be on the sidelines.”
Meanwhile, insurers are continuing to press insurance regulators for changes in what they believe to be inflexible, counterproductive capital accounting rules.
