A top-level arm of the National Association of Insurance Commissioners wants to let state guaranty associations pull cash from life insurers, not just from health insurers, when issuers of long-term care insurance (LTCI) fail.
Members of the NAIC’s Financial Condition Committee approved a proposed rewrite of the NAIC’s Life and Health Insurance Guaranty Association Model Act (Model Number 520) earlier this week, at the NAIC’s fall national meeting in Honolulu.
The proposed revision would add life insurers to the list of carriers that must chip in when an LTCI issuer fails.
The revision would also give a guaranty association that’s paying a failed LTCI issuer’s claims explicit authority to seek premium rate increases.
The committee working group that developed the revision says the NAIC should adopt it before the end of 2017, because some states want to change their LTCI receivership laws in 2018.
The NAIC plenary, the body that includes all voting members of the NAIC, must approve the proposed revision before it can take effect.
The Financial Condition Committee put a copy of the proposed guaranty association model rewrite in its fall meeting document packet.
The NAIC is a group for state insurance commissioners. It has no direct ability to change states’ insurer insolvency laws and programs, but many states start with NAIC models when developing their own insurance laws and regulations.