The National Association of Insurance Commissioners (NAIC) executive committee is considering a model that could affect the way regulators oversee insurance holding companies.
An insurance holding company is a company that is not an insurance company and owns another company that is an insurance company.
The NAIC is seeking comments on a package of changes to the existing Insurance Holding Company System Regulatory Act, or Model 440, which defines an “insurance holding company system” as an entity that “consists of two … or more affiliated persons, one or more of which is an insurer.”
The NAIC’s Financial Condition Committee approved the changes in August, and the executive committee wants any comments on the proposal to come in by Nov. 22.
The underlying model deals with matters such as subsidiaries of insurers, acquisitions, examinations, receivership and recovery.
The proposed changes would add a section on “supervisory colleges.”
The supervisory colleges section would give a commissioner overseeing any registered insurer “the power to participate in a supervisory college for any domestic insurer that is part of an insurance holding company system with international operations in order to determine compliance by the insurer” with holding company rules, according to the model revision draft.
The commissioner would have the authority to work with the college to develop a crisis management plan.
A registered insurer would have to pay for the “reasonable expenses of the commissioner’s
participation in a supervisory college … including reasonable travel expenses,” according to the draft.
Another addition would require an insurer to make available to a commissioner “financial statements of or within an insurance holding company system, including all affiliates,” according to the draft. “An insurer required to file financial statements pursuant to this paragraph may satisfy the request by providing the commissioner with the most recently filed parent corporation financial statements that have been filed with the SEC.”
The model act would provide for keeping much of the information a commissioner obtained from a holding company system confidential.
“Documents, materials or other information filed with the NAIC pursuant to this Act shall be confidential by law and privileged, shall not be subject to [insert open records, freedom of information, sunshine or other appropriate phrase], shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action,” according to the model draft.