NAIC Panel Posts Insurance Solvency Draft

The drafts write that the United States has “a national system of state based regulation.”

Here, “ultimate regulatory responsibility for insurer solvency rests with each state insurance department and the state insurance Commissioner,” the framework drafters write.

By following solvency standards, performing risk-focused financial surveillance, and enforcing solvency-related insurance laws, regulations and guidelines, the state regulatory system has limited insurer insolvencies, the drafters write.

“A hallmark of the state regulatory system is its dynamic efforts to constantly improve the regulatory solvency system and adjust the system as needed, especially regarding inputs into the model used to determine asset, liability and capital requirements,” the drafters write.

One point of the framework paper, the drafters add, is to explain how information flows to regulators and how regulators use the information to take appropriate actions.

In the framework draft, the drafters also provide a regulation mission statement.

In the United States, the mission of insurance regulation is, “To protect the interests of the policyholder and those who rely on the insurance coverage provided to the policyholder first and foremost, while also facilitating an effective and efficient market place for insurance products.”