The National Association of Insurance Commissioners will be holding a public hearing on the future of the major rating agencies at its upcoming fall meeting.
The NAIC, Kansas City, Mo., will examine the role of the “nationally recognized statistical rating organizations” in the insurance regulatory system and any changes that might be needed in light of the financial crisis.
The NAIC is expecting representatives from the rating agencies, insurers and pension funds to speak at the hearing. Other speakers will include regulators, consumer representatives, and academic researchers.
The NAIC plans to hold the hearing Sept. 24.
The 4-day meeting is set to start Sept. 21 in National Harbor, Md., a suburb of Washington.
In addition to announcing the rating agency hearing, the NAIC also has posted the meeting agendas for its Executive Committee and for the plenary, the body that represents all voting NAIC members.
The Executive Committee expects to consider approval of formation of a broker compensation task force and a long term care task force Sept. 22.
The Executive Committee and the plenary plan to consider adoption of amendments to the Standard Valuation Law model, the Long-Term Care Insurance Model Act and the Long-Term Care Insurance Model Regulation at a Sept. 23 joint session.
The proposed SVL amendments would advance efforts to change life reserving rules to reflect a “principles-based” reserving strategy. PBR advocates want to shift toward use of modern statistical forecasting techniques and sound actuarial judgment, and away from static formulas, in an effort to help insurers and regulators become more thoughtful and more flexible. Critics suggest that some insurers might use PBR rules as an excuse to cut reserves to unrealistically low levels.
The joint session agenda also includes a number of measures that the American Council of Life Insurers, Washington, proposed in late 2008, in response to the financial crisis.
One is a model regulation amendment that would permit the recognition of preferred mortality tables for use in determining minimum reserve liabilities. Another measure would affect how life insurers proceed when mortality rates improve after a life insurance policy is issued.