The American Council of Life Insurers and America’s Health Insurance Plans have expressed skepticism about state regulators’ solvency rules update project.

The Solvency Modernization Initiative Task Force at the National Association of Insurance Commissioners, Kansas City, Mo., has posted a paper on ways to improve regulation of corporate governance and risk management, and another paper on regulatory capital requirements.

The task force has posted 176 pages of comments on its website.

Many commenters have observed that quite a few laws, regulations, regulatory schemes and rating agency review mechanisms already deal with insurer insolvency.

“We strongly encourage the NAIC to consider the existing environment for the U.S. insurance sector before any new insurance regulations over corporate governance and risk management are added,” Maryellen Coggins writes in a comment submitted on behalf of the American Academy of Actuaries, Washington.

Rating agencies have beefed up assessments of risk management programs, and the NAIC itself calls for thorough reviews of risk management processes through the Risk Focused Surveillance Framework, according to Coggins, who is chairperson of the enterprise risk management subcommittee of the AAA’s Risk Management & Financial Reporting Council.

“We would hope that any new regulations would be enhancements to, rather than replacements of, existing frameworks,” Coggins writes.

Wayne Mehlman, a counsel at the ACLI, Washington, writes that insurers “are already subject to well-established corporate governance requirements.”

“There is no need to duplicate or replicate a system of well-settled and effective … corporate governance laws,” Mehlman writes.

In some cases, new rules could cause conflicts with existing laws, Mehlman writes.

Randi Reichel of AHIP, Washington, is recommending that the NAIC avoid conflicts by bringing in corporate governance subject matter experts from organizations such as the U.S. Securities and Exchange Commission, the New York Stock Exchange and NASDAQ to ensure that any new rules complement, ratherthan conflict with, existing rules.

In the consultaton paper, many of the requirements “go well beyond prudent regulation into the actual micro-management of the industry,” Reichel writes. “Regulatory requirements that make it more difficult for companies to secure talented and necessary board members, and requirements that layer reporting obligations not tied to effective and efficient regulatory oversight are not prudent; they create multiple layers of bureaucracy but no effective regulation.”

Reichel writes that the consultation paper gives the impression that the NAIC might seek to require insurers to make search committee member discussions about candidates for board seats public.

“No serious or sophisticated candidate would consent to take part in a process such as that,” Reichel writes.

Reichel also questions whether the kinds of changes the authors of the consultation papers have proposed ought to apply to health insurers.

“Before changes to a system are undertaken, prudence requires that there be a specifically targeted set of issues or problems that are intended to be addresses,” Reichel writes. “In the health insurance arena, we are unaware of any failings in corporate governance that require addressing.”

James Gallagher, an executive vice president at John Hancock Financial Services, Boston, a unit of Manulife Financial Corp., Toronto (TSE:MFC), contends in a comment on the task force paper on regulatory capital requirements that proposed efforts to make U.S. rules more similar to the International Financial Reporting Standards are misguided.

“We believed that Proposed Insurance Standard of IFRS Phase II would misrepresent our business results and threaten the ability of North American insurers to offer affordable, long-term guaranteed products, such as life insurance, annuities and long term care insurance, which are less common in Europe,” Gallagher writes.

Convering with the IFRS standards also would reduce Hancock’s ability to invest in long-term term investments, including corporate bonds and infrastructure bonds, Gallagher writes.