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.