executive (ex) committee · the committee and subcommittee a dopted the report of th e audti...

© 2019 National Association of Insurance Commissioners

EXECUTIVE (EX) COMMITTEE Executive (EX) Committee Minutes, April 7, 2019, Minutes

Executive (EX) Committee Interim Meeting Report (Attachment One) Executive (EX) Committee Task Force Reports (Attachment Two) NAIC State Ahead Strategic Plan Implementation Report (Attachment Three) NAIC Designation Program Advisory Board Annual Report (Attachment Four) Report of Model Law Development Requests (Attachment Five)

W:\National Meetings\2019\Spring\Cmte\Ex\contents.doc

Draft Pending Adoption

© 2019 National Association of Insurance Commissioners 1

Draft: 4/17/19

Executive (EX) Committee Orlando, Florida

April 7, 2019 The Executive (EX) Committee met in Orlando, FL, April 7, 2019. The following Committee members participated: Eric A. Cioppa, Chair (ME); Raymond G. Farmer, Vice Chair (SC); David Altmaier, Vice President (FL); Dean L. Cameron , Secretary-Treasurer (ID); Julie Mix McPeak, Most Recent Past President (TN); Lori K. Wing-Heier (AK); Jim L. Ridling (AL); Stephen C. Taylor (DC); James J. Donelon (LA); Chlora Lindley-Myers (MO); John G. Franchini (NM); Jillian Froment (OH); Jessica Altman (PA); Elizabeth Kelleher Dwyer (RI); Larry Deiter (SD); and Tom Glause (WY). Also participating were Jon Godfread (ND); and Marlene Caride (NJ). 1. Adopted the Report of the Executive (EX) Committee and Internal Administration (EX1) Subcommittee Joint Meeting Superintendent Cioppa reported the Executive (EX) Committee met April 6 in joint session with the Internal Administration (EX1) Subcommittee. The meeting was held in regulator-to-regulator session pursuant to paragraph 4 (internal or administrative matters of the NAIC) of the NAIC Policy Statement on Open Meetings. During this joint meeting, the Committee and Subcommittee adopted its 2018 Fall National Meeting minutes. The Committee and Subcommittee adopted the Executive (EX) Committee’s Feb. 1 and Jan. 11 minutes, which included the following action: 1) approved members of the 2019 System for Electronic Rate and Form Filing (SERFF) Advisory Board; 2) approved the International Association of Insurance Supervisors (IAIS) Executive Committee selection process and member recommendations; 3) recommended the Property and Casualty Insurance (C) Committee change the name of the Climate Change and Global Warming (C) Working Group to the Climate Risk and Resilience (C) Working Group; and 4) appointed a regulator member to the National Insurance Producer Registry (NIPR) Board of Directors. The Committee and Subcommittee adopted the report of the Internal Administration (EX1) Subcommittee, which met Feb. 14 and took the following action: 1) received an update on the defined benefit plan portfolio as of Dec. 31, 2018; 2) received an update on the NAIC long-term investment plan portfolio as of Dec. 31, 2018; and 3) adopted the long-term investment portfolio asset class mix recommendation and fund manager selection. The Committee and Subcommittee adopted the report of the Audit Committee, which met April 5 and took the following action: 1) received an overview of the Dec. 31, 2018, financial statements and the Feb. 28, 2019, summary financials; and 2) received the 2018 audit report from RSM, the NAIC’s auditor. The Committee and Subcommittee adopted the report of the Information Systems (EX1) Task Force, which met April 5 and took the following action: 1) adopted its 2018 Fall National Meeting minutes; and 2) received an operational report on the NAIC’s information technology (IT) activities. The Committee and Subcommittee approved relocating the 2021 Fall National Meeting from San Francisco, CA to San Diego, CA. The Committee and Subcommittee also: 1) approved the NAIC providing technical assistance, including tools and training for state insurance regulators, in the area of predictive modeling; 2) approved the NAIC filing an amicus brief in Guardian Flight vs. Godfread; 3) received the joint chief executive officer (CEO)/chief operating officer (COO) report; and 4) received a cybersecurity update. Director Farmer made a motion, seconded by Director Lindley-Myers, to adopt the report of the joint meeting of the Executive (EX) Committee and the Internal Administration (EX1) Subcommittee. The motion passed. 2. Adopted its Feb. 1 and Jan. 11 Interim Meeting Report Commissioner McPeak made a motion, seconded by Commissioner Altmaier, to adopt the Committee’s Feb. 1 and Jan. 11 interim meeting report (Attachment One). The motion passed.



3. Adopted the Reports of its Task Forces The Committee received reports from the Financial Stability (EX) Task Force, the Government Relations (EX) Leadership Council and the Innovation and Technology (EX) Task Force. Commissioner Caride further reported that the Financial Stability (EX) Task Force’s mandate is to analyze existing post-financial crisis regulatory reforms for their use in identifying macroeconomic trends, including identifying possible areas of improvement or gaps. The Task Force aims to improve the ability of state insurance regulators and the industry to address macroprudential impacts and overall financial stability. Commissioner Caride reported that a major project of the Task Force is the Macroprudential Initiative (MPI), which focuses on making improvements in four main areas: 1) liquidity risk; 2) recovery and resolution; 3) capital stress testing; and 4) counterparty exposure/concentration. Liquidity risk is a priority, and the Task Force received approval for financial statement blanks changes effective at year-end 2019, that should help to better identify liquidity risks. The Task Force also has made progress toward the design of a liquidity stress testing framework using a cash flow approach. Commissioner Altmaier made a motion, seconded by Commissioner Glause, to adopt the reports of the Financial Stability (EX) Task Force, the Government Relations (EX) Leadership Council and the Innovation and Technology (EX) Task Force (Attachment Two). The motion passed. 4. Received a Status Report on the NAIC State Ahead Strategic Plan Implementation Superintendent Cioppa provided an update on the NAIC State Ahead implementation efforts. State Ahead is a three-year strategic plan for the organization intended to further advance the products, services and support the NAIC provides to state insurance regulators in order to better meet the changing regulatory landscape. Technical components of plan implementation were presented (Attachment Three). The Executive (EX) Committee and Internal Administration (EX1) Subcommittee also heard a report during its April 6 meeting on the efforts to transform the organization’s culture, career development efforts for internal staff and diversity initiatives at the NAIC, all of which will help the NAIC better position itself for the future. 5. Received the 2018 Annual Report of NAIC Designation Program Advisory Board Activities Commissioner Godfread provided an updated on the NAIC Designation Program Advisory Board’s activities, and the 2018 achievements for the NAIC Insurance Regulator Professional Designation Program (Attachment Four). In 2018, there was an increase of more than 300 insurance regulator designation enrollments. At year-end, enrollments totaled 2,038, since its inception in 2006. In 2018, 181 new professional insurance regulation designations were awarded, for a total of 1,075 designations earned to date. Commissioner Godfread reported, at the Advisory Board’s annual meeting in May 2018, the Advisory Board reviewed policy recommendations, discussed the allocation of renewal credits and established new goals for the future of the program. The Advisory Board plans to meet in May at the NAIC’s Central Office in Kansas City, MO. Commissioner Godfread also reported on the state mentor program, which provides a designated department employee “mentor” to act as liaison between each insurance department and the NAIC’s Education and Training Department. They help disseminate information to state insurance regulators and assist with answering candidates’ questions. Commissioner Godfread thanked Mary Mealer (MO), Patrick McNaughton (WA), Scott Sanders (GA) and Paula Pallozzi (Retired, RI) for their hard work and dedication in developing this program into the success it is today. 6. Received a Report on the Actuarial Credentialing Project Commissioner Ridling reported that in 2017 the Committee decided to revise the property/casualty (P/C) Statement of Actuarial Opinion Instructions to create an objective definition of a “qualified actuary” and to make other changes in line with guidance presented by an NAIC consultant.



Commissioner Ridling reported that the Committee: 1) appointed an ad hoc group of commissioners to oversee the Appointed Actuary Project (the ad hoc group now includes Commissioner Ridling, Superintendent Cioppa and Commissioner Donelon); 2) requested NAIC staff to work with actuarial organizations and volunteers to complete the project; and 3) assigned three charges to the Casualty Actuarial and Statistical (C) Task Force. Commissioner Ridling reported that working with a consultant and numerous volunteers, NAIC staff completed the first phase of the Appointed Actuary Project, called the Job Analysis Project and developed a list of knowledge statements defining what a P/C appointed actuary needs to know and to do in order to provide an expert actuarial opinion to accompany the annual statutory financial statement. Commissioner Ridling also reported that NAIC staff began the second phase of the Appointed Actuary Project, called the Educational Standards and Assessment Project, using the knowledge statements from the Job Analysis Project to develop minimum actuarial educational standards. These standards define the syllabi and educational content of an actuarial education program to provide minimum basic education for a P/C appointed actuary. The project also documented numerous areas where the P/C actuary is expected to need additional experience and continuing education to do the appointed actuary job. With those minimum standards in place, the NAIC is now conducting an assessment of the P/C actuarial education offered by the Casualty Actuarial Society and the Society of Actuaries. The end result (due in mid-May) will be a determination of which actuarial credentials, under specific terms, will be the new NAIC accepted actuarial designations. These designations form the foundation of the new “qualified actuary” definition in the instructions. The Casualty Actuarial and Statistical (C) Task Force worked on its three charges: attestation; experience; and continued competence. Commissioner Ridling reported the Task Force combined all of the changes being proposed to the P/C Statement of Actuarial Opinion Instructions and exposed the instructions Dec. 15, 2018, for a 60-day public comment period ending Feb. 15, 2019. In light of written comments received, the Task Force revised the instructions and held a hearing to discuss any remaining issues. Additional changes may be made to the proposed instructions based on the hearing with a re-exposure of particular parts of the instructions after the assessments are completed. The final proposal will be submitted to this Committee in June. 7. Received a Report of Model Law Development Efforts Superintendent Cioppa presented a written report on the progress of ongoing model law development efforts (Attachment Five). 8. Heard a Report from the NIPR Board of Directors Commissioner Glause reported the NIPR Board of Directors met April 5 and heard a report from the NIPR Audit Committee regarding NIPR’s financials through year-end 2018 and the 2018 financial audit. Revenues were 7.2% above budget and 8.6% above revenues for the prior year. NIPR received a clean audit for 2018. The NIPR Board also heard a report from the Investment Committee regarding 2018 year-end investments and approved a new asset allocation mix for NIPR’s investments. The NIPR Board heard an update on the NAIC and NIPR’s progress on cloud migration, which is a strategic priority for NIPR. In addition, the NIPR Board received a report on the NAIC and NIPR’s ongoing cybersecurity initiatives. The NIPR released its 2018 annual report, which is available on the NIPR website. 9. Heard a Report from the Compact Director Froment reported that the Interstate Insurance Product Regulation Commission (Compact) held a joint meeting with its Management Committee April 5. The Compact also held a public strategy session, as it is conducting a member-driven strategic planning process with the goal of developing a three-year strategic plan by year-end. During this session, feedback was received from state insurance regulators, consumer and industry representatives, and state legislators on what they perceive as the opportunities and challenges for the Compact. This feedback will be combined with responses received from an online member survey and survey of other stakeholders. The next step will be to develop a set of draft strategic priorities to be presented to the Compact membership this summer. The Compact also heard a report of its Audit Committee, which relayed an unqualified audit opinion for 2018.



The Compact released its 2018 annual report, which is available on the Compact website and shows progress with respect to growth in product operations and other activities. The Compact is performing strongly in terms of financial results for the periods ending 2018 and first quarter 2019 and is over budget in terms of revenue. In 2018, the Compact earned its largest net positive revenue of $141,000. The Compact received an update from its Regulatory Counsel Committee on third-party litigation involving questions of whether the Compact is a proper delegation of authority by a state legislature under its constitution. Currently, this matter is being briefed before the U.S. Court of Appeals for the Tenth Circuit in the case Amica v. Wertz. The NAIC and the Compact will file an amicus brief in this matter. Having no further business, the Executive (EX) Committee adjourned. W:\National Meetings\2019\Spring\Cmte\Ex\4-Exmin.docx

Attachment One Executive (EX) Committee

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EXECUTIVE (EX) COMMITTEE February 1, 2019 and January 11, 2019

Interim Meeting Report

The Executive (EX) Committee met Feb. 1, 2019 and Jan. 11, 2019. The meetings were held in regulator-to-regulator session pursuant to paragraph 4 (internal or administrative matters of the NAIC or any NAIC member) of the NAIC Policy Statement on Open Meetings. During these meetings, the Committee: 1. Appointed Alaska, Illinois, Missouri, Nevada, New Mexico and North Carolina to serve on the 2019 System for Electronic

Rate and Form Filing (SERFF) Advisory Board. Commissioner Barbara D. Richardson (NV) will serve as chair of the 2019 SERFF Advisory Board.

2. Appointed Commissioner David Altmaier (FL) and Commissioner Gary Anderson (MA) to serve on the International

Association of Insurance Supervisors’ (IAIS) Executive Committee and appointed Director Raymond G. Farmer (SC) as the standing member of the IAIS Executive Committee.

3. Approved a recommendation to the Property and Casualty Insurance (C) Committee to: a) change the name of the Climate

Change and Global Warming (C) Working Group to the Climate Risk and Resilience (C) Working Group; and b) consider the adoption of charges that reflect the expanded scope.

4. Appointed Commissioner Nancy G. Atkins (KY) to serve on the National Insurance Producer Registry (NIPR) Board of

Directors beginning in January 2019. 5. The NAIC officers and the Government Relations (EX) Leadership Council recommended Commissioner Jon Godfread

(ND) for the U.S. Department of Transportation’s (DOT) advisory committee on air ambulance and patient billing. This advisory committee will provide recommendations to the Secretary of the DOT and the Secretary of the U.S. Department of Health and Human Services. There is a requirement that the advisory committee include a state insurance regulator, although there was no specific request that the NAIC make a recommendation.

6. Appointed Florida, Idaho, Kentucky, Massachusetts, Missouri, Ohio, Oklahoma and Wyoming as members of the

2019 Audit Committee. W:\National Meetings\2019\Spring\Cmte\Ex\Att 1 EX Interim Mtg Report.docx

Attachment Two Executive (EX) Committee

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Draft: 4/5/19

REPORT OF THE EXECUTIVE (EX) COMMITTEE TASK FORCES Financial Stability (EX) Task Force—The Financial Stability (EX) Task Force met April 8 and took the following action: 1) adopted its Feb. 8, 2019, and 2018 Fall National Meeting minutes; 2) noted that the Liquidity Assessment (EX) Subgroup met in regulator-to-regulator session March 26, 2019, pursuant to paragraph 3 (specific companies, entities or individuals) of the NAIC Policy Statement on Open Meetings, to discuss liquidity stress test design; 3) heard an update on Financial Stability Oversight Council (FSOC) developments; 4) received an update from the Liquidity Assessment (EX) Subgroup on its progress toward achieving its deliverables related to liquidity stress testing; 5) received an update from the Receivership and Insolvency (E) Task Force on its work to address the Financial Stability (EX) Task Force’s referral letter to undertake analysis relevant to the NAIC Macroprudential Initiative; and 6) discussed the FSOC’s proposed interpretative guidance regarding nonbank financial company designations. Government Relations (EX) Leadership Council—The Government Relations (EX) Leadership Council did not meet at the Spring National Meeting. The Leadership Council meets weekly via conference call in regulator-to-regulator session, pursuant to paragraph 8 (consideration of strategic planning issues relating to federal legislative and regulatory matters or international regulatory matters) of the NAIC Policy Statement on Open Meetings, to discuss federal legislative and regulatory developments affecting insurance regulation. Innovation and Technology (EX) Task Force—The Innovation and Technology (EX) Task Force met April 8 and took the following action: 1) adopted its 2018 Fall National Meeting minutes; 2) received updates on various workstreams discussed during the 2018 Fall National Meeting, including legal research on anti-rebating, cancellation/renewal practices and e-signature issues, and plans for gathering more specific information on these issues from incumbents as well as the startup and producer community; 3) heard presentations from innovators and key players in the InsurTech space, including presentations from Plug and Play—a Silicon Valley InsurTech accelerator—on regulatory challenges facing innovators, and Markel Digital on its experiences in the innovative space and partnership with Verifly and the American Association of Insurance Services (AAIS) on their blockchain data call smart contract project; and 4) heard an update on South Carolina’s implementation of the Insurance Data Security Model Law (#668) and federal activity in the cybersecurity space. A summary of the activities of the Task Force since its formation in 2017 was provided, as well as an update on recent activities related to blockchain.

The Big Data (EX) Working Group met April 6 and took the following action: 1) adopted its Feb. 25 minutes, during which the Working Group adopted its 2018 Fall National Meeting minutes and discussed its 2018 workstreams and 2019 charges; 2) heard a recommendation from NAIC management to: (a) hire a technical staff resource to provide technical support for insurance regulators in the review of actuarial models; (b) develop a tool for state insurance departments to share information on model reviews; and (c) develop a training and education program; 3) adopted a motion to request the Life Insurance and Annuities (A) Committee through an existing working group, or by appointment of a new working group, and in collaboration with the ongoing work of the Life Actuarial (A) Task Force (Experience Reporting Subgroup), study the use of external data and data analytics in accelerated life underwriting and draft and propose appropriate state guidance or best practices; and 4) received an update from the Casualty Actuarial and Statistical (C) Task Force. The Task Force exposed a draft white paper regarding best practices for the review of predictive models and analytics filed by insurers to justify rates, the development of state guidance (e.g., information and data) for rate filings that are based on complex predictive models and the development of training for the sharing of expertise through predictive analytics webinars.

The Speed to Market (EX) Working Group did not meet at the Spring National Meeting. The Working Group conducted a System for Electronic Rate and Form Filing (SERFF) survey early this year to determine the usefulness of existing SERFF tools. The Working Group plans to meet after the Spring National Meeting to discuss the survey results.

W:\National Meetings\2019\Spring\Cmte\Ex\Att 2 TF CombinedRpt.docx

Project Portfolio Update

Twenty – Nine Active Projects with a Technical Component

• Eight Projects Added Since Last Report

Three Projects Completed Since Last Report

• SBS South Carolina Implementation Phase I

• SBS System Hardening Adjustments

• Security Application Enhancements

Technical Roadmap

Attachment Three Executive (EX) Committee

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Attachment Four Executive (EX) Committee

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To: Members of the NAIC Executive Committee

From: Commissioner Jon Godfread (ND), Chair of the NAIC Insurance Regulator Professional Designation Program Advisory Board

Date: April 7, 2019

Subject: 2018 Annual Report of NAIC Designation Program Advisory Board Activities

The NAIC Insurance Regulator Professional Designation Program (“Designation Program”), is a formal credentialing program designed for regulators, by regulators. It establishes structured training and development paths for all insurance department employees. At the direction of the NAIC Internal Administration (EX1) Subcommittee, the program’s Advisory Board Chair annually presents a brief report of Board activities and program milestones. This memorandum, and its supplemental chart, summarize our progress. Program Enrollments In 2018, over 300 state insurance regulators enrolled in the designation program, bringing the total number of enrollments, since the program’s inception in 2006, to 2,038. 181 new designations were awarded in 2018, bringing a new total of 1,075 designations earned: 771 Associate Professional Insurance Regulator (APIR) designees, 282 Professional Insurance Regulator (PIR) designees, 21 Senior Professional Insurance Regulator (SPIR) designees, and 1 IPIR designee. The NAIC’s 2018-2021 State Ahead Strategic Plan emphasizes our focus to boost new regulator enrollments and program participation over the next three years. Program Improvements Another State Ahead goal seeks to provide regulators with the tools to support a collaborative regulatory environment, including the use of cloud capabilities. In 2018, the Designation Program provided regulators with a new cloud-based online enrollment and course tracking system. The new system dramatically streamlined the enrollment process and enhanced reliability and security of the hundreds of regulator designation program transcripts. The Investment Curriculum (IPIR Level) In 2018 five regulators enrolled in the newer Investment Professional Insurance Regulator (IPIR) designation, with one on track to conduct his capstone exercise in 1Q19. The Financial Curriculum (PIR Level) Extensive revisions to the financial solvency curriculum was made this year related to the risk-focused approach for financial analysis. Courses updated include Regulating for Solvency and Intermediate Insurance Company Financial Analysis. The Leadership Curriculum (SPIR level) SPIR Candidates requirements include completing two in-person courses: The Regulatory Leadership Forum and the Practical Manager Program. In 2018, the first SPIR Practical Manager Program was held September 11 – 12, in Kansas City, MO with 29 participants. The class included six SPIR Candidates, including 1 NAIC Member. Attendees gave the program overwhelmingly positive reviews. The Designation Program Mentoring Network NAIC Members continue to designate a department employee as their in-house designation program “mentor”, to serve as liaison between the Insurance Department and the NAIC’s Education & Training Department. Mentors help disseminate program information to staff, and answers candidate’s questions. By 2018, most of the appointed mentors have earned, or are working toward earning, a NAIC Designation. The Annual Designation Program Advisory Board Meeting The Designation Program Advisory Board met regularly throughout the year via conference call to discuss policy matters and receive staff updates on progress with program initiatives. An annual in-person board meeting was held May 7 in Kansas City.


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About the Insurance Regulator Professional Designation Program Advisory Board The 2018 Advisory Board members were – Chair: Commissioner Jon Godfread (ND), Midwest Zone: Mary Mealer, Life/ Health Manager (MO); Western Zone: Pat McNaughton, Chief Financial Examiner (WA); Northeast Zone: Paula Pallozzi, Associate Director (RI) and Southeast Zone: Scott Sanders, Supervisor Insurance & Financial Oversight, (GA). In addition to overseeing the NAIC Designation Program policies and advising NAIC E&T Department staff on program policy administration, the board members work year-round to provide outreach to state insurance regulators and encourage designation program participation. Additional information about the Designation Program can be found by visiting the NAIC website: http://naic.org/education_designation.htm

http://naic.org/education_designation.htm


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Attachment Five Executive (EX) Committee

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Draft: 4/3/19

Model Law Development Report Amendments to the Accident and Sickness Insurance Minimum Standards Model Act (#170) and the Model Regulation to Implement the Accident and Sickness Insurance Minimum Standards Model Act (#171)—Amendments to Model #170 and Model #171 are required for consistency with the federal Affordable Care Act (ACA) and, therefore, did not require approval of a Request for NAIC Model Law Development by the Executive (EX) Committee. At the 2015 Fall National Meeting, the Regulatory Framework (B) Task Force discussed the proposed revisions to the models. The Task Force requested additional comments by Jan. 22, 2016. The Task Force met Feb. 11, 2016, and appointed the Accident and Sickness Insurance Minimum Standards (B) Subgroup to work on revisions to the models. The Subgroup has been meeting on a regular basis since the 2016 Spring National Meeting and plans to continue meeting via conference call until it completes its work. During its meetings, the Subgroup has discussed a number of issues, including its approach for revising the models’ disability income insurance coverage provisions, and decided preliminarily to review the Interstate Insurance Product Regulation Commission’s (Compact) approach. After pausing its work due to the ACA’s potential repeal, replacement or modification—and the possible impact on the provisions of both models, as well as the Subgroup’s preliminary proposed revisions to the models—the Subgroup began meeting again via conference call in May 2018, starting with discussions of revisions to Model #170. The Subgroup adopted revisions to Model #170 during its July 23, 2018, conference call and forwarded the draft to the Regulatory Framework (B) Task Force for its consideration. The Task Force met via conference call Oct. 17 and Sept. 24 and agreed to additional revisions. The Task Force adopted the revisions to Model #170 at the 2018 Fall National Meeting. The Health Insurance and Managed Care (B) Committee adopted the revisions during its Feb. 14, 2019, conference call. The Executive (EX) Committee and Plenary will consider adoption of the revisions to Model #170 (including changing the title to the Supplementary and Short-Term Health Insurance Minimum Standards Model Act) at the 2019 Spring National Meeting. The Subgroup is currently searching for a new chair. As soon as a new chair is appointed, the Subgroup plans to begin its work to revise Model #171. Amendments to the Annuity Disclosure Model Regulation (#245)—The Executive (EX) Committee met June 19, 2017, and approved a Request for NAIC Model Law Development to amend Model #245. The amendments will revise Section 6—Standards for Illustrations. The purpose of the revision is to address issues identified by the Life Insurance and Annuities (A) Committee’s Annuity Disclosure (A) Working Group related to innovations in annuity products that are not addressed, or not addressed adequately, in the current standards. Revisions addressing participating income annuities were adopted by the Life Insurance and Annuities (A) Committee during its July 19, 2018, conference call and held pending the resolution of the Working Group’s discussions regarding illustrating indexes in existence for less than 10 years. The Working Group continues to discuss additional revisions on the index issue. The Working Group plans to meet via conference call following the 2019 Spring National Meeting to conclude its work. Amendments to the Suitability in Annuity Transactions Model Regulation (#275)—Amendments to Model #275 are being drafted for consistency with federal rules and, therefore, did not require approval of a Request for NAIC Model Law Development by the Executive (EX) Committee. The Life Insurance and Annuities (A) Committee’s Annuity Suitability (A) Working Group is drafting amendments to Model #275 that would raise the standard of conduct requirement for insurers and producers offering annuity products. The Working Group held an in-person meeting in late May 2018 to consider the comments received after the 2018 Spring National Meeting. During that meeting, the Working Group discussed comments on Section 6—Duties of Insurers and Insurance Producers and set a preliminary framework for establishing an enhanced suitability standard. In late October 2018, the Working Group met again to draft amendments to the remaining sections of the model. The Working Group met at the 2018 Fall National Meeting to continue discussing the draft revisions. During this meeting, the Working Group agreed to forward a draft of proposed revisions to Model #275 to the Life Insurance and Annuities (A) Committee for its consideration. At the 2018 Fall National Meeting, the Life Insurance and Annuities (A) Committee decided that it wanted to receive comments from a broader group of NAIC members and other stakeholders and exposed the Working Group draft of proposed revisions to Model #275 for a public comment period ending Feb. 15, 2019. The Life Insurance and Annuities (A) Committee and the Working Group are meeting jointly at the 2019 Spring National Meeting to discuss the comments received. During this meeting, it is anticipated that the Life Insurance and Annuities (A) Committee will provide guidance to the Working Group on the issues it wants the Working Group to work on and resolve in the next draft of proposed revisions to Model #275.

Attachment Five Executive (EX) Committee

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Amendments to the Life Insurance Disclosure Model Regulation (#580) and Life Insurance Illustrations Model Regulation (#582) Policy Overview Document—The Executive (EX) Committee met June 19, 2017, and approved the Request for NAIC Model Law Development to incorporate a policy overview document requirement into Model #580 and Model #582 in order to improve the understandability of the life insurance policy summary and narrative summary already required by Section 5A(2) of Model #580 and Section 7B of Model #582. The Life Insurance and Annuities (A) Committee’s Life Insurance Illustration Issues (A) Working Group has been meeting via conference call to develop language to add a requirement for a one- to two-page consumer-oriented policy overview. Amendments to the Mortgage Guaranty Insurance Model Act (#630)—The Executive (EX) Committee and Plenary approved the Request for NAIC Model Law Development to amend Model #630 on July 26, 2013. The Financial Condition (E) Committee’s Mortgage Guaranty Insurance (E) Working Group developed substantial changes to the model but continues to discuss those changes. The Working Group’s focus has shifted to working with a consultant to produce a capital model that will serve as the basis for levels of intervention included in Model #630. The Working Group has received an extension from the Financial Condition (E) Committee until the 2019 Summer National Meeting. Amendments to the Credit for Reinsurance Model Law (#785) and Credit for Reinsurance Model Regulation (#786)—The Executive (EX) Committee approved the Request for NAIC Model Law Development to amend Model #785 and Model #786 during its April 17, 2018, conference call. The Reinsurance (E) Task Force is drafting amendments to conform to the reinsurance collateral provisions of the “Bilateral Agreement Between the United States of America and the European Union on Prudential Measures Regarding Insurance and Reinsurance” (Bilateral Agreement) that was signed Sept. 22, 2017. The amendments will provide reinsurers domiciled in NAIC qualified jurisdictions other than within the European Union (EU) with similar reinsurance collateral reductions but only if such jurisdictions agree to the states’ approach to group supervision, group capital, information-sharing and enforcement. Revisions to Model #785 and Model #786 were exposed for a public comment period ending July 23, 2018, and the NAIC received 18 comment letters. Model #785 and Model #786 were revised based on the comments received and testimony heard at the 2018 Summer National Meeting and were re-exposed for a public comment period ending Oct. 16, 2018. The NAIC received 13 comment letters. Model #785 and Model #786 were revised based on the comments received and updated drafts were released Nov. 9, 2018, for public discussion at the 2018 Fall National Meeting. At the 2018 Fall National Meeting, the Reinsurance (E) Task Force adopted the revisions to Model #785 and Model #786, and the Financial Condition (E) Committee adopted the revisions to the models but provided direction to NAIC staff and the informal drafting group of the Reinsurance (E) Task Force to further consider technical changes and clarifications consistent with comments that were received at the meeting. Model #785 and Model #786 were revised based on the comments received and testimony heard at the 2018 Fall National Meeting and were re-exposed for a public comment period ending April 1, 2019. The Reinsurance (E) Task Force intends to discuss the comments received from the most recent exposure at the 2019 Spring National Meeting. New Model: Real Property Lender-Placed Insurance Model Act—The Executive (EX) Committee approved the Request for NAIC Model Law Development, submitted by the Property and Casualty Insurance (C) Committee, to draft the new Real Property Lender-Placed Insurance Model Act at the 2017 Summer National Meeting. The Property and Casualty Insurance (C) Committee’s Lender-Placed Insurance Model Act (C) Working Group exposed a draft of this proposed new model focusing on lender-placed insurance related to mortgage loans. The Working Group accepted public comments through Oct. 31, 2018. At the 2018 Fall National Meeting, the Property and Casualty Insurance (C) Committee approved the Working Group’s request for an extension of time to draft revisions to the proposed new model. The Working Group will request another extension at the 2019 Spring National Meeting. W:\National Meetings\2019\Spring\Cmte\Ex\Att 5 ModelLawDevelopmentReport.docx

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