WASHINGTON BUREAU — An arm of the National Association of Insurance Commissioners (NAIC) has agreed to add a discussion of the differences between the U.S. approach to corporate governance regulation and various international approaches to a key draft document.
The Corporate Governance Working Group at the NAIC, Kansas City, Mo., talked about the draft, of corporate governance requirements within U.S. insurance regulation, recently during a conference call that was scheduled to replace an in-person session knocked out by Hurricane Irene.
The working group plans to add the comparison of the U.S. and international approaches to the document introduction.
The working group also agreed to insert guidance discussing how exceptions to corporate governance standards are dealt with throughout the U.S. solvency framework, according to an NAIC meeting summary.
The working group decided to combine the draft of corporate governance requirements within U.S. insurance regulation with interested parties’ work on general corporate governance requirements that apply to U.S. insurance entities.
The decisions come during an active month of meetings, when regulators are traveling abroad and in Washington to talk about international solvency standards with insurance industry representatives from countries such as Canada and Japan.
Earlier this month, a delegation of U.S. regulators traveled to Frankfurt to discuss solvency requirements modernization and harmonization with their European counterparts. The EU is taking steps to implement Solvency II – a set of financial services regulatory requirements that is supposed to take effect in the EU and the European Economic Area in January 2013 — and is trying to work with the U.S. regulators to harmonize systems internationally.
NAIC President Susan Voss, the Iowa insurance commissioner, is now in Seoul at a meeting of the International Association of Insurance Supervisors (IAIS), Basel, Switzerland, where she is discussing issues such as international supervision, standards and financial stability.
Connecticut Insurance Commissioner Thomas Leonardi has argued that Solvency II is well-intentioned but untested, and he has told fellow regulators and other industry members that premature attempts to harmonize standards could weaken consumer protections and the stability of insurers.
“In reality, Solvency II is a much-needed effort to modernize an admittedly outmoded European regulatory regime, but it has been aggressively marketed by some as the ‘be all and end all’ of insurance regulation,” Leonardi said this summer. “In my opinion, this creates not only a problem but does a disservice to the broader challenge of achieving true equivalence on an outcomes basis.”