NAIC Spring National Meetings, Houston, Texas – April 5-9, 2013
The following is a summary of select developments and discussions addressed at the NAIC Spring National Meetings held in Houston, Texas on April 5-9, 2013.1
1. Executive (EX) Committee/Plenary
The Executive (EX) Committee and Plenary met on April 9, 2013. During this meeting, the Committee took a number of actions, including, but not limited to the following:
- Adopting the April 7 Executive (EX) Committee meeting report, including (i) adopting a model law development request to amend the Creditor-Placed Insurance Model Act (#375), (ii) creating the NAIC/American Indian Liaison Committee, and (iii) ratifying the 2013 SERFF Board members;
- Adopting its March 1 conference call minutes, which includes the Committee’s 2013 charges;
- Receiving reports from the Life Insurance and Annuities (A) Committee, Health Insurance and Managed Care (B) Committee, Property and Casualty Insurance (C) Committee, Market Regulation and Consumer Affairs (D) Committee, Financial Condition (E) Committee, Financial Regulation Standards and Accreditation (F) Committee, and International Insurance Relations (G) Committee;
- Adopting the 2011 revisions to the Credit for Reinsurance Model Law (#785) and the Credit for Reinsurance Model Regulation (#786) for accreditation purposes;
- Receiving an update on the states’ implementation of NAIC model laws and regulations; and
- Referring an issue to the Health Insurance and Managed Care (B) Committee regarding treatment of fixed indemnity coverage under the federal Affordable Care Act.
2. Principle-Based Reserving Implementation (EX) Task Force
The Principle-Based Reserving Implementation (EX) Task Force met on April 6, 2013, and released a new draft of its principle-based reserving (“PBR”) implementation plan (“Plan”) for comment. The Plan calls for replacement of the current formulaic approach to determining life insurance policy reserves with the PBR approach, a reserving methodology which more closely aligns policy reserves to product risks. The Valuation Manual setting forth the PBR reserving requirements was adopted by the NAIC in December 2012. The Plan varies from prior drafts in certain respects, including addition of a new Section IV calling for the NAIC to further examine the solvency implications of life insurer-owned captive insurers and other alternative mechanisms, such as special purpose vehicles in the context of PBR. It notes that this will largely be based on the report of Captives and Special Purpose Vehicle Use (E) Subgroup's Report, and that a new working group will likely be created to focus on this issue. The attendees of the meeting discussed the captive issue in some detail, and noted that reserve redundancies expected to be eliminated upon implementation of PBR may reduce the need for captives and SPVs. The draft Plan also covers the resources necessary to implement and administer the new reserving regime, among other things. The comment period for the Plan is 30 days.
3. Producer Licensing (EX) Task Force
The Producer Licensing (EX) Task Force is charged with developing uniform standards of producer and adjuster licensees and licensing terminology, monitoring and responding to developments in licensing reciprocity, coordinating with industry and consumer groups regarding licensing reform priorities, and coordinating and consulting with the National Insurance Producer Registry (“NIPR”) Board of Directors to develop and implement uniform producer licensing initiatives. The Task Force met on April 7, 2013. During the meeting it received the report of the NAIC Producer Licensing Working Group (see below). The Task Force also discussed navigators under the Patient Protection and Affordable Care Act, which will serve at the first point of contact between consumers and state health care exchanges, essentially helping consumers “navigate” the system. The Task Force considered certification and education requirements with respect to navigators, among other things.
4. Producer Licensing (EX) Working Group
The Producer Licensing (EX) Working Group met on April 7, 2013. The Working Group discussed its 2013 charges, which include reviewing the process for examination development and delivery of education materials for pre-licensing education, providing oversight and ongoing updates to the State Licensing Handbook, maintaining and reviewing reciprocity guidelines, and providing input and feedback to NAIC/NIPR staff regarding the development of electronic-licensing applications, among other things. During the meeting, the Working Group indicated that it plans to develop a unified document with respect to continuing education (“CE”) course approvals, and discussed the proposed CE Education Standardized Terms and Definitions document developed by CE providers. The Working Group is accepting comments on this document until April 19, 2013. The Working Group also discussed uniform applications and is accepting comments with respect to the applications until April 19 as well.
Click here for more developments and discussions addressed at the NAIC Spring National Meetings.