The Solvency Modernization Initiative Task Force could have recommendations for updating the risk-based capital (RBC) system ready in December 2012.
The task force, part of the National Association of Insurance Commissioners (NAIC), Kansas City, Mo., has created a draft of a solvency road map.
Members of another NAIC task force, the Capital Adequacy Task Force, met in Washington in July to talk about ways to update and improve the current RBC system, which gives insurers and regulators a method to adjust the estimated value of investment holdings for investment risk.
Participants seemed to think that the life insurance RBC model should reflect the interaction between asset and liability valuations and the long-term nature of a life insurer’s liabilities, officials say in a description of the meeting.
In the road map draft, a separate document, officials suggest that the Solvency Modernization Initiative Task Force could develop a plan for modifying RBC formulas by December, then have an industry impact study come out in 2012 before deciding whether to make the changes.
The NAIC could come out with a new governance and risk management model around the same time, officials say.