State insurance regulators are still thinking about keeping the public from seeing insurance companies' risk-based capital ratios.
The Capital Adequacy Task Force, an arm of the National Association of Insurance Commissioners, put an RBC ratio confidentiality proposal on the agenda for an in-person task force session set to take place Aug. 12, at the NAIC's upcoming summer national meeting in Minneapolis.
The RBC ratio confidentiality proposal is part of an effort to update the NAIC's Risk-Based Capital Preamble. The preamble provides a short history of the RBC project and an explanation of how the NAIC thinks RBC ratios should be used.
An RBC ratio is a score that shows whether an insurance company has enough financial resources to meet insurance policy and annuity contract obligations, even at times when stock prices and real estate prices are low and some borrowers are having trouble making bond and loan payments.
The RBC ratio confidentiality proposal would keep insurers from putting RBC ratios in "earnings releases, webcast materials or any other earnings presentations or webcasts."
The task force has been discussing the proposal since 2023 and opened a public comment period for the RBC ratio preamble project that ended in May.
What it means: RBC ratio confidentiality supporters say the proposal would protect the public, by keeping insurers from showing members of the public figures that could be misleading when used out of context.
Groups and individuals that oppose the RBC ratio confidentiality proposal — including the American Council of Life Insurers, Brendan Bridgeland of the Center for Insurance Research, and Peter Gould, a retiree who owns an annuity — say access to RBC ratios is helpful.
"The change in the preamble is a thinly veiled attempt to remove RBC data from publicly available annual statutory statements," Gould wrote in a letter sent in May and included in a task force meeting packet. "This would deprive stakeholders (including consumers, policy owners, investors, insurance professionals, researchers, journalists, academics and others) of information that is vital to the selection and monitoring of insurers."
In some states, attempts to keep RBC ratios confidential could conflict with state public disclosure laws, Bridgeland wrote in another comment letter.
Existing restrictions on use of RBC ratio data give state insurance regulators the authority to curb abuse, Bridgeland wrote.
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