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Life Health > Health Insurance > Your Practice

NAIC Roundup: Health Care; Actuarial Guidelines; More

By Allison Bell

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State regulators tried to get an idea of how big is big this past weekend as they talked about implementing the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act.

President Obama created years-and possibly decades-of work for state insurance regulators, state health regulators, and the National Association of Insurance Commissioners, Kansas City, Mo., when he signed the bills creating PPACA and HCERA into law.

Policy experts are just starting to dig behind the act summaries and read the actual language in the new laws, but thoughts about just what state insurance regulators will have to do to put PPACA and HCERA into effect came up often at the NAIC’s spring meeting in Denver.

News surfaced that U.S. Health and Human Services Secretary Kathleen Sebelius, a former Kansas insurance commissioner and former NAIC president, already has hired Jay Angoff, a former Missouri insurance commissioner, to help her communicate with the NAIC and keep tabs on the private insurance market.

Kevin Lucia, a Georgetown University health policy researcher who receives NAIC funding to represent consumer interests in NAIC proceedings, tried to give members of the NAIC’s Consumer Liaison Committee an idea of the size of the task facing regulators by discussing PPACA provisions that refer directly to the NAIC.

The committee has posted Lucia’s list of those provisions on its Web site.

Some of the PPACA sections cited will do the following:

–Require the U.S. Department of Health and Human Services to consult with the NAIC to develop the summary of benefits and coverage disclosure documents required under the act.

–Create health plan external review procedures that must comply with the NAIC’s Uniform External Review Model Act.

–Require HHS officials to define permissible health insurance pricing age bands in consultation with the NAIC.

–Provide that the new health insurance exchanges must use a “uniform enrollment plan that takes into account criteria submitted by NAIC to HHS.”

–Require HHS to work with the NAIC to set the regulations needed to create the exchanges; establish qualified health plan requirements; and create risk-adjustment and reinsurance provisions and other terms of the insurance reform.

–Require NAIC to help figure out how commercial long term care insurance policies will or will not coordinate with the new CLASS Independence Benefit federal long term care benefits program.

Lucia suggests in a separate document that PPACA and HCERA indirectly will create a need for the NAIC to help with many other tasks.

“As states consider the list of legislative and regulatory tasks before them, many will seek other ‘best practice’ recommendations from NAIC, even if not required by the legislative language,” Lucia says in the document. “For example, new premium rate review standards, to be used by state and federal regulators in connection with the 2010 plan year, are an area in which the NAIC will likely need to play a larger role than the one envisioned in the federal legislation.”

NAIC will have just 6 to 9 months to give HHS officials recommendations about many PPACA and HCERA provisions, Lucia says in the document.

Also at the spring meeting, the NAIC took these actions:

–Adopted Actuarial Guideline 43-CARVM, which sets variable annuity reserving guidelines.

–Adopted a white paper on methods for helping troubled companies.

–Adopted a guideline on life and health guaranty fund disclosure notices.

In addition, the NAIC’s Internal Administration Subcommittee took these actions:

–Adopted a proposal to reinstitute salary increases for NAIC staffers effective July 1. Salaries were frozen July 1, 2009. The NAIC can increase salaries about 3.5% because its defined benefit pension plan has been doing better, officials say.

–Adopted a proposal to restructure the lines of credit that the NAIC provides for the Interstate Insurance Product Regulation Commission. The NAIC will defer principal and interest payments owed by the IIPRC until the IIPRC makes a profit of $250,000 or achieves an accumulated cash balance from operations of $500,000, officials say.

The NAIC’s Life Insurance and Annuities Committee took these actions:

–Released several valuation manual section drafts for public comment. They include sections on experience reporting requirements and reporting formats and a section on principles-based report requirements for business subject to a principle-based reserve valuation.

Also at the spring meeting, the Executive Committee of the NAIC announced it had established a Market Regulation Accreditation Task Force; a Multi-State Enforcement Task Force; and a Regulatory Modernization Task Force.

And in another development, the Accident and Health Working Group found that the 1985 NAIC cancer cost tables cannot be replaced because of a lack of data. The group is asking the American Academy of Actuaries, Washington, to help insurers and regulators cope with the deficiency by “giving “appropriate guidance on current application of the 1985 tables.”

Arthur D. Postal added information to this report.

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