NAIC Update: Spring 2014
The Spring 2014 National Association of Insurance Commissioners (NAIC) meeting, held in Orlando, Florida, was the first under the leadership of North Dakota Commissioner Adam Hamm. The motto of Hamm's home state is a Daniel Webster quote that may seem appropriate for the state regulators whose insurance regulatory monopoly has come under challenge from home and abroad: "Liberty and union, now and forever, one and inseparable."
Numerous NAIC speakers pointed out the organization's move toward more openness, in contrast to the perceived closed nature of some other supervisory organizations. Any internal dissent seemed restrained by contrast.
Major items of interest included the current status of principle-based reserving for life insurers, especially given the unyielding opposition of some large states; the use of affiliated captives for reinsurance purposes by life insurers and the Rector Report that was commissioned to provide a regulatory roadmap for the NAIC on such use; new rules for contingent deferred annuities; and a review of the availability and affordability of auto insurance.
In general, this was a meeting defined more by ongoing discussion than by final decisions. Progress was made on various topics. But just as the thorny issue of who will really regulate insurers as state, federal and international authorities collide in an increasingly smaller and more connected regulatory world remains an unresolved question, so too many of the questions discussed here await final resolution. Industry perhaps can look forward to August in Kentucky to provide a little more clarity on the regulatory road ahead.
This issue of the NAIC Update features the following:
- Rector Report on captives gets mixed reviews
- NAIC issues report on auto insurance availability and affordability
- Corporate governance of the NAIC gets attention
- Risk officers question global capital requirements
- TRIA renewal gets strong support