the synopsis 2017 · 2017-04-26 · synopsis of the naic committee, subcommittee and task force...

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© 2017 National Association of Insurance Commissioners. All rights reserved.

© 2017 National Association of Insurance Commissioners

Date: 4/24/17

Synopsis of the NAIC Committee, Subcommittee and Task Force Meetings 2017 Spring National Meeting

April 8–11, 2017

To: Members of the NAIC and Interested Parties From: The Staff of the NAIC Committee Action NAIC staff have reviewed the committee, subcommittee and task force reports and highlighted the actions taken by the committee groups during the Spring National Meeting in Denver, CO. The purpose of this report is to provide NAIC members, state insurance regulators and interested parties with a summary of these meeting reports. EXECUTIVE (EX) COMMITTEE AND PLENARY (Joint Session) April 11, 2017 1. Adopted the April 9 report of the Executive (EX) Committee. 2. Adopted by consent the committee, subcommittee and task force minutes of the 2016 Fall National Meeting. 3. Adopted the NAIC 2017 amended committee charges. 4. Adopted a proposal to appoint a joint task force of the Health Insurance and Managed Care (B) Committee and the

Financial Condition (E) Committee regarding long-term care (LTC) activities. 5. Received the following committee reports: 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.

6. Adopted amendments to the Health Insurance Reserves Model Regulation (#10) to incorporate the 2016 Cancer Claim Cost Valuation Tables.

7. Adopted amendments to A Consumer’s Guide to Home Insurance and A Shopping Tool for Homeowners Insurance. 8. Adopted amendments to the Privacy of Consumer Financial and Health Information Regulation (#672). 9. Adopted amendments to the Consumer Board of Trustees Plan of Operation. 10. Received an update on the states’ implementation of NAIC-adopted model laws and regulations. EXECUTIVE (EX) COMMITTEE April 9, 2017 1. Adopted the April 8 report from the joint meeting of the Executive (EX) Committee and the Internal Administration

(EX1) Subcommittee, which included the following action: a. Adopted its 2016 Fall National Meeting minutes. b. Adopted the Executive (EX) Committee minutes of Feb. 10 and Jan. 13, which included the following action:

1. Approved changes to the Executive (EX) Committee task force structure, which included appointing an Innovation and Technology (EX) Task Force, pending adoption of charges on an open call.

2. Appointed one consumer representative and three industry representatives for property/casualty (P/C) and life/health to the System for Electronic Rate and Form Filing (SERFF) Advisory Board.

3. Appointed Director Larry Deiter (SD) to the National Insurance Producer Registry (NIPR) Board of Directors. c. Adopted the Feb. 17 report of the Internal Administration (EX1) Subcommittee, which included the following

action: 1. Received an update on the defined benefit plan and long-term investment plan portfolios as of Dec. 31, 2016. 2. Adopted a recommendation from the NAIC’s independent financial advisor to liquidate an investment and

reinvest it in the current line-up of equity funds. d. Adopted the April 7 Audit Committee report, which included the following action:

1. Received an overview of the Dec. 31, 2016, financial statements and the Feb. 28, 2017, summary financials. 2. Received the 2016 audit report from RSM auditors. 3. Discussed the zone funding review provided by RSM. 4. Received the 2016 Service Organization Control (SOC) 1 Report.

e. Adopted the April 8 report of the Information Systems (EX1) Task Force, which included the following action: 1. Received project portfolio summary reports. 2. Received project status reports for active strategic technical projects. 3. Received updates on technical projects closed from November 2016 through February 2017. 4. Received an update on the review of a new 2017 fiscal with a technology component.

© 2017 National Association of Insurance Commissioners 2

f. Approved the request from the Interstate Insurance Production Regulation Commission (IIPRC) for a $100,000 line of credit to be available during 2017.

g. Approved the selection of a consultant for the Mortgage Guaranty Capital Model Project. h. Selected the meeting locations for the 2021 national meetings: the Spring National Meeting will be held in Dallas,

TX; the Summer National Meeting will be held in Columbus, OH; and the Fall National Meeting will be held in San Francisco, CA.

i. Designated Michael F. Consedine (NAIC CEO) to serve on the NIPR Board of Directors effective immediately. 2. Adopted its interim meeting summary report from Feb. 10 and Jan. 13. 3. Adopted its March 9 minutes, which included the following action:

a. Adopted the final report of the Governance Review (EX) Task Force. b. Adopted changes to the Executive (EX) Committee task force structure. c. Adopted a funding request regarding system enhancements to receive private letter ratings directly from nationally

recognized statistical ratings organizations (NRSROs). 4. Adopted the reports of its task forces: the Financial Stability (EX) Task Force, including its 2017 amended charges;

the Government Relations (EX) Leadership Council; the Innovation and Technology (EX) Task Force; and the Principle-Based Reserving Implementation (EX) Task Force.

5. Approved the model law development request for the Short Duration Long-Term Care Policies Model. 6. Received an update on the model law review initiative. 7. Received the 2016 annual report of the NAIC Insurance Regulator Professional Designation Program. 8. Received a status report of model law development efforts for amendments to: Model #10; Health Carrier Prescription

Drug Benefit Management Model Act (#22); Accident and Sickness Insurance Minimum Standards Model Act (#170); Model Regulation to Implement the Accident and Sickness Insurance Minimum Standards Model Act (#171); Creditor-Placed Insurance Model Act (#375); Mortgage Guaranty Insurance Model Act (#630); Model #672; Standard Nonforfeiture Law for Individual Deferred Annuities (#805); and development of the new Unclaimed Life Insurance and Annuities Model Act and the new Insurance Data Security Model Law.

9. Received reports from NIPR and the IIPRC. Financial Stability (EX) Task Force April 8, 2017 1. Adopted its 2016 Fall National Meeting minutes. 2. Adopted its amended charges to add the following to its existing charges: Analyze existing post-financial crisis

regulatory reforms for their application in identifying macroeconomic trends, including identifying possible areas of improvement or gaps, and propose to the Financial Condition (E) Committee or other relevant committee enhancements and/or additions to further improve the ability of state insurance regulators and industry to address macro-prudential impacts; consult with such committees on implementation as needed.

3. Heard an industry panel on macro-prudential monitoring and group supervision, which discussed potential enhancements to macro-prudential monitoring and related activities for consideration by the NAIC.

Governance Review (EX) Task Force The Governance Review (EX) Task Force completed its charges and, on March 9, the Executive (EX) Committee disbanded the Task Force. Government Relations (EX) Leadership Council The Government Relations (EX) Leadership Council did not meet at the Spring National Meeting. Innovation and Technology EX) Task Force April 10, 2017 1. Adopted the April 8 report of the Big Data (EX) Working Group (f.k.a. Big Data (D) Working Group), which included

the following action: a. Adopted its 2016 Fall National Meeting minutes. b. Heard a presentation from Lawrence S. Powell, Ph.D. (University of Alabama) on big data and regulation in the

insurance industry. Dr. Powell’s presentation focused on the benefits of insurers’ use of big data, including more accurate pricing, better claims processing and identification of potential fraud, increased availability of insurance and improvement of insurers’ operational efficiency. Dr. Powell said the current regulatory system is well-suited to address insurers’ use of big data.


c. Discussed its draft work plan for 2017, which sets forth the three charges of the Working Group and provides guidance on its planned actions. The work plan will be modified to provide more emphasis on how insurers’ innovations in the use of data are having a positive impact on consumers. The Working Group exposed its work plan for a public comment period ending April 14. After a review of any comments, the work plan will be modified to provide additional prioritization of tasks and timelines for completion.

2. Adopted the April 9 report of the Cybersecurity (EX) Working Group (f.k.a. Cybersecurity (EX) Task Force), which included the following action: a. Adopted its 2016 Fall National Meeting minutes. b. Heard a presentation regarding federal cybersecurity updates. The Financial and Banking Information Infrastructure

Committee (FBIIC) has emphasized the importance of incorporating cybersecurity in financial oversight responsibilities. The federal banking regulators have proposed a standards-based, tiered approach to establishing a cybersecurity framework with prescriptive standards, which would apply to insurance savings and loan holding companies and insurers that have been designated as significantly important financial institutions (SIFIs). The National Institute of Standards and Technology (NIST) has issued a draft update to its Cybersecurity Framework, to further develop NIST’s voluntary guidance on reducing cyber risks.

c. Heard a presentation from the New York State Department of Financial Services regarding the implementation and status of its Cybersecurity Requirements for Financial Services Companies. The New York State Department of Financial Services developed the cybersecurity requirements due to current cybersecurity threats to financial institutions, as well as insurers. The cybersecurity requirements emphasize the importance of risk assessment.

d. Received an update from the Insurance Data Security Model Law drafting group. A third version of the Insurance Data Security Model Law was released on Feb. 27 and the Working Group has received comments from interested parties. There appears to be consensus regarding the risk-based security requirements in the current version of the draft model law. The drafting group will continue to meet via conference call in an effort to reach consensus among interested stakeholders.

e. Heard a presentation from HEMISPHERE Cyber Risk Management and the Association for Cooperative Operations Research and Development (ACORD). ACORD is committed to create a unified approach for cyber risk to improve data quality. By focusing on data standards for risk controls that are actionable and repeatable, ACORD will address market challenges by investing in assets and solutions to support regulators. HEMISPHERE Cyber Risk Management indicated that an insurer’s questionnaires regarding an organizations cybersecurity program vary by carrier and do not align to the current threat landscape.

3. Adopted the April 9 report of the Speed to Market (EX) Working Group (f.k.a. Speed to Market (EX) Task Force), which included the following action: a. Adopted its Jan. 11 minutes, which included the following action:

1. Adopted its 2016 Summer National Meeting minutes. 2. Adopted its Sept. 29 and Sept. 26 minutes, during which the Working Group adopted its 2017 proposed

charges. 3. Adopted the report of the Operational Efficiencies (EX) Subgroup (f.k.a. Operational Efficiencies (EX) Working

Group). 4. Heard an update on SERFF implementation projects and activities. 5. Received an update on 2017 proposed fiscal requests. 6. Received a report from the SERFF Advisory Board. 7. Heard a report from the IIPRC.

b. Adopted the report of the Operational Efficiencies (EX) Subgroup (f.k.a. Operational Efficiencies (EX) Working Group), which included the following action: 1. Adopted its March 7 and Feb. 14 minutes, during which the Subgroup discussed turnaround time standards for

each business type. The Subgroup decided to leave the turnaround time standard at 40 days for all business types for 2017 and consider revising it in 2018.

c. Received an update on SERFF implementation projects and activity. SERFF is less than 1% behind budget for transaction revenue, and it is expected to receive approximately 618,000 filings in 2017. Evaluation has been completed for a redesign of the SERFF user interface, including prioritization and analysis of features to be improved and design of a new look and feel. The team has begun evaluating and estimating architecture and technical work to begin a rewrite project with the assumption that SERFF will be rewritten as a cloud native system. The updates to SERFF for plan management of plan year 2018 have been made.

d. Received a report from the SERFF Advisory Board. The Advisory Board reported that revenues are close to budget as of Feb. 28. The Advisory Board welcomed three new members: Secretary of Commerce Mark O. Rabauliman (MP); Alex Dolan (Oscar Insurance); and Katie Gurnett (Physicians Mutual Insurance Co).

e. Heard a report from the IIPRC indicating the Interstate Insurance Product Regulation Compact (#692) has been enacted by 44 states and Puerto Rico to date, representing 75% of the premium volume nationwide. Connecticut becomes effective for filing in July.


4. Adopted the 2017 charges for its working groups. The charges for the Big Data (EX) Working Group and the Speed to Market (EX) Working Group were adopted under the previous committee structure and were adopted as-is by the Task Force. The charges for the Cybersecurity (EX) Working Group were also adopted under the previous committee structure; however, the Task Force adopted amendments to the charges as follows: a. Deleted: Review the following models and make recommendations to the Executive (EX) Committee:

NAIC Insurance Information and Privacy Protection Model Act (#670); Model #672; Standards for Safeguarding Consumer Information Model Regulation (#673); and Insurance Fraud Prevention Model Act (#680).

b. Added: Continue development of the Insurance Data Security Model Law. This model law is specific to insurers, brokers and other state-regulated entities regarding cybersecurity standards.

5. Discussed the Task Force’s charge to study insurance issues related to mobility/autonomous vehicles and agreed it would be appropriate to add a new charge to study the insurance issues related to microinsurance.

6. Heard comments from interested parties related to innovation and technology, supporting the formation of the Task Force and offering suggestions regarding approaches to carrying out its charges.

7. Requested that any suggestions for speakers and/or presentations to assist the Task Force in achieving its goals be sent to Denise Matthews (NAIC).

8. Discussed its next steps, including the possibility of meeting prior to the Summer National Meeting. International Insurance Relations (EX) Leadership Group On March 9, the Executive (EX) Committee disbanded the International Insurance Relations (EX) Leadership Group and merge its charges into the International Insurance Relations (G) Committee. Principle-Based Reserving Implementation (EX) Task Force April 10, 2017 1. Adopted its 2016 Fall National Meeting minutes. 2. Discussed the results of the 2016 Principle-Based Reserving (PBR) Pilot Project. 3. Adopted revised charges for the PBR Review (EX) Working Group. 4. Adopted the April 7 report of the PBR Review (EX) Working Group, which included the following action:

a. Adopted its 2016 Fall National Meeting minutes. b. Adopted its March 15 minutes, during which the Working Group adopted its 2017 charges. c. Adopted the report of the PBR Review Procedures (EX) Subgroup, which included the following action:

1. Referred edits made to the Financial Analysis Handbook actuarial chapters to the Financial Analysis Handbook (E) Working Group for consideration.

2. Exposed edits made to the Financial Condition Examiners Handbook for a 30-day public comment period ending April 3.

d. Discussed results and observations documented in the 2016 PBR Company Pilot Final Report. e. Disclosed the membership of the Valuation Analysis (E) Working Group as approved by the Financial Condition (E)

Committee and heard an update from NAIC staff that the development of the standard portfolio model has been completed and that sensitivity testing of model assumptions is being conducted to develop a sense of how much the reserve changes given a change in a modeling assumption.

f. Discussed PBR training programs that are available to state insurance regulators. Regulators were reminded that the training programs developed by Actuarial Compass and the Society of Actuaries (SOA) are free of charge to state insurance regulators. It was reported that the SOA training program has three modules completed, with three additional modules to be completed by the end of May. NAIC staff will send state insurance regulators a reminder email detailing the process of how to access the training programs from the SOA and Actuarial Compass. The American Academy of Actuaries (Academy) also gave an update on its upcoming PBR Boot Camp training seminar.

g. Heard a report from NAIC staff on the status of the Company Experience Data Collection project. 5. Received an update on the Life Actuarial (A) Task Force’s PBR-related work, which included the following action:

a. Adopted revisions to the Valuation Manual, Section 9.C.3.g of VM-20, Requirements for Principle-Based Reserves for Life Products; VM-22, Maximum Valuation Interest Rates for Income Annuities (which provides the methodology for determining valuation interest rates for income annuities and is designed to be more responsive to the economic environment than the current interest determination method); and four amendments for nonsubstantive clarifying changes.

b. Adopted recommended revisions to the life and health, and fraternal actuarial opinion instructions to correct references to the Standard Valuation Law (#820) and to reflect an operative Valuation Manual.


c. Exposed numerous revisions for substantive changes to the Valuation Manual for a 21-day public comment period ending May 1, including the following: Valuation Manual companywide exemption; VM-22 to make the method for determining the valuation interest rate for income annuities more responsive to the economic environment; VM-30, Actuarial Opinion and Memorandum Requirements, to clarify the documentation requirements for assumptions related to mortality; an amendment to reflect immediate payment of claims in the net premium reserve (NPR) calculation; an amendment to revise the requirement for Task Force exposure and adoption of the asset default costs and asset spreads; and modifications to VM-51, Experience Reporting Formats, to add data fields that make Appendix 4 and Appendix 6 consistent with the 2017 data call by the New York Department of Financial Services (NYDFS) and the Kansas Insurance Department (KID).

6. Adopted a revised PBR Implementation Plan. 7. Concluded its work on the XXX/AXXX Reinsurance Framework. Producer Licensing (EX) Task Force On March 9, the Executive (EX) Committee disbanded the Producer Licensing (EX) Task Force and moved its charges to the newly appointed Producer Licensing (D) Task Force under the Market Regulation and Consumer Affairs (D) Committee. INTERNAL ADMINISTRATION (EX1) SUBCOMMITTEE See the Executive (EX) Committee listing for details. Information Systems (EX1) Task Force April 8, 2017 1. Adopted its 2016 Fall National Meeting minutes. 2. Received an update on the security activities of the NAIC and NIPR. 3. Received an operational report on the NAIC’s information technology (IT) activities, including: product highlights;

service; key data-collection metrics; human resources; process improvements; technology adoption and system usage; the NAIC/NIPR Insurance Summit; and an innovation and new technology update.

4. Received a project portfolio summary report and project status reports for the 15 active technical projects. The portfolio summary report included a roadmap representing each project to include the current status, percentage of work complete and project end date.

5. Received an update on technical projects closed from November through February, including: 1033 Decision Repository and Remove Special Activities Database (SAD); Committee Preference Enhancements; Enhancement and Expansion of Application Testing Infrastructure; Life Insurance Policy Locator; Market Analysis Prioritization Tool (MAPT) Major Medical; and Specification Generator Enhancements.

6. Received an update on the review of a 2017 fiscal with a technology component by the Technical Consulting (EX1) Working Group.

7. Agreed to change the date and time of the Task Force’s Summer National Meeting, as long as the meeting time does not conflict with the Travel Insurance (C) Working Group meeting.

LIFE INSURANCE AND ANNUITIES (A) COMMITTEE April 9, 2017 1. Adopted its Feb. 24 minutes, which included the following action:

a. Adopted its 2016 Fall National Meeting minutes. b. Adopted its revised 2017 charges to have the Model law Review (A) Subgroup work with the Life Actuarial (A)

Task Force to review issues identified during the Subgroup’s completion of the Model Law Review Initiative. c. Heard updates from its task force and working groups. d. Adopted a new annuity suitability charge to: 1) appoint an Annuity Suitability (A) Working Group to review and

revise, as necessary, the Suitability in Annuity Transactions Model Regulation (#275); and 2) consider how to promote greater uniformity across NAIC member jurisdictions.

2. Heard a presentation on the NAIC Life Insurance Policy Locator Service (LIPLS). Launched in November 2016, the LIPLS has received 15,333 requests and made 1,796 matches, with a total claim amount of $17,203,767.00. A subject-matter expert conference call was held March 21 in regulator-to-regulator session to discuss possible modifications to the LIPLS in the future, as suggested by state insurance regulators and the industry.

3. Adopted the report of the Annuity Disclosure (A) Working Group, which included the following action: a. Adopted its March 9 minutes, during which the Working Group discussed two issues identified under its charge to

review and revise, as necessary, the illustration standards in the Annuity Disclosure Model Regulation (#245) in light of innovations in the marketplace. The Working Group agreed to consider a request for model law development to revise Model #245 on its next conference call.


4. Adopted the April 8 report of the Annuity Suitability (A) Working Group, which included the following action: a. Discussed its charge to consider revisions to Model #275 current suitability standards related to the best interest

standard. Heard a presentation on the current provisions in Model #275 and the number of states that have adopted the model’s provisions.

b. Heard a discussion of the U.S. Department of Labor’s (DOL) fiduciary rule and its current status. c. Heard from a panel of stakeholders—consumers, industry, and agents and brokers—regarding the Working Group’s

charge and its proposed work. 5. Adopted the report of the Life Insurance Buyer’s Guide (A) Working Group, which included the following action:

a. Adopted its March 27, March 13, Feb. 27 and Feb. 7 minutes, during which the Working Group discussed potential formats, structure and content for the revised Life Insurance Buyer’s Guide (Buyer’s Guide) and adopted a motion to forward to the Life Insurance and Annuities (A) Committee a request for model law development to remove the Buyer’s Guide from the appendix to the Life Insurance Disclosure Model Regulation (#580) so that it can be a stand-alone document.

6. Adopted a request for model law development to remove the Buyer’s Guide as an appendix to Model #580. 7. Adopted the report of the Life Insurance Illustration Issues (A) Working Group, which included the following action:

a. Adopted its Jan. 9 minutes, during which the Working Group continued to discuss how to develop a one- to two-page policy overview document to help consumers better understand specific life insurance policies. The Working Group agreed to forward to the Life Insurance and Annuities (A) Committee a request for model law review development to incorporate a short policy overview document into Model #580 and the Life Insurance Illustrations Model Regulation (#582). The request did not contemplate incorporating a policy overview template into the models. The Working Group plans to work with stakeholders on a template that could serve as a best practices document.

8. Adopted a request for model law development to incorporate a short policy overview document requirement into Model #580 and Model #582.

9. Adopted the report of the Promoting Appropriate Sales Practices in Life Insurance and Annuities (A) Working Group (f.k.a. Preventing Abuses in Life Insurance and Annuities (A) Working Group), which included the following action: a. Adopted its March 24 minutes, during which the Working Group continued to discuss draft revisions to the NAIC

Consumer Alert “Preventing Abusive Practices: The Misuse of Senior Designations and ‘Free Lunch’ Seminars” and agreed to develop a survey to assist the Working Group in determining whether the Model Regulation on the Use of Senior-Specific Certifications and Professional Designations in the Sale of Life Insurance and Annuities (#278) should be revised.

10. Adopted the report of the Unclaimed Life Insurance Benefits (A) Working Group, which included the following action: a. Adopted its March 7 minutes, which included suspending its work pending guidance from the Life Insurance and

Annuities (A) Committee due to the lack of consensus on the issue of the draft proposed Unclaimed Life Insurance and Annuities Model Act’s applicability to existing and future policies, contracts and retained asset accounts.

11. Extended the request for model law development for the drafting of a new model to address unclaimed benefits and adopted a proposed request that the Unclaimed Life Insurance Benefits (A) Working Group develop a concise list of key controversial issues in the draft proposed Unclaimed Life Insurance and Annuities Model Act for review by the Life Insurance and Annuities (A) Committee.

12. Adopted the report of the Life Actuarial (A) Task Force, which included the following action: a. Adopted its March 16, March 9, March 2, Feb. 23, Feb. 2 and Jan. 25 minutes, which included the following action:

1. Adopted revisions to Actuarial Guideline XXXVIII—The Application of the Valuation of Life Insurance Policies Model Regulation (AG 38).

2. Adopted revisions to the life and health, and fraternal actuarial opinion instructions to correct references to Model #820 and to reflect an operative Valuation Manual.

3. Adopted revisions to Section 9.C.3.g of VM-20. b. Exposed revisions to the Valuation Manual companywide exemption and to proposed VM-22, which make the

method for determining the valuation interest rate for income annuities more responsive to the economic environment.

c. Adopted four amendments for nonsubstantive clarifying changes to the Valuation Manual. d. Exposed seven amendments for substantive changes to the Valuation Manual. e. Received a recommendation for an actuarial guideline to clarify the applicability of the prospective test in

Model #805, noting that it is no longer necessary for the Life Insurance and Annuities (A) Committee to defer submission of the proposal for Model #805 revisions related to contingent deferred annuities (CDAs) for consideration by Executive (EX) Committee and Plenary.

f. Adopted its subgroup reports. 12. Adopted revisions to AG 38.


Life Actuarial (A) Task Force April 6–7, 2017 1. Adopted its March 16, March 9, March 2, Feb. 23, Feb. 2 and Jan. 25 minutes, which included the following action:

a. Adopted revisions to AG 38. b. Adopted revisions to Section 9.C.3.g of VM-20. c. Exposed revisions to the Valuation Manual companywide exemption. d. Exposed revisions to proposed VM-22 that make the method for determining the valuation interest rate for income

annuities more responsive to the economic environment. e. Adopted recommended revisions to the life and health, and fraternal actuarial opinion instructions to correct

references to Model #820 and to reflect an operative Valuation Manual. 2. Discussed the PBR Pilot Project Report, changes to the Financial Condition Examiner’s Handbook, changes to the

Financial Analysis Handbook and the Valuation Analysis (E) Working Group. 3. Received the Model #805 drafting group recommendation for an actuarial guideline to clarify the applicability of the

prospective test in Model #805. The recommendation noted that it is no longer necessary for the Life Insurance and Annuities (A) Committee to defer submission of the proposal for Model #805 changes related to contingent deferred annuities for consideration by the Executive (EX) Committee and Plenary.

4. Exposed the Academy Life Experience Committee and the SOA Preferred Mortality Oversight Group’s (Joint Committee) 2017 Guaranteed Issue Mortality Tables Report, the accompanying mortality tables, and the working definition for GI business.

5. Heard an update on the Simplified Issue (SI) and accelerated underwriting (AUW) mortality table work of the SI/AUW VM-20 Practice Work Group. The update focused on the differentiation between SI and AUW underwriting practices.

6. Adopted the report of the VM-22 (A) Subgroup, including its Feb. 7 minutes. The Task Force also adopted the proposed VM-22 which provides the methodology for determining valuation interest rates for income annuities and is designed to be more responsive to the economic environment than the current interest determination method.

7. Adopted the report of the Longevity Risk (A/E) Subgroup, including its Feb. 21 minutes. The Task Force exposed revisions to VM-30 intended to clarify the documentation requirements for assumptions related to mortality.

8. Adopted four amendments for non-substantive clarifying changes to the Valuation Manual. The changes include moving the tables from VM-20 Appendix 2 to the “Related Documents” tab on the Task Force web page. A link to the Related Documents tab will be added to VM-20 Appendix 2.

9. Exposed seven amendments for substantive changes to the Valuation Manual for a 21-day public comment period ending May 1, including an amendment to reflect immediate payment of claims in the net premium reserve calculation and an amendment to revise the requirement for Task Force exposure and adoption of the asset default costs and asset spreads.

10. Heard an update from the IIPRC. 11. Adopted the report of the Experience Reporting (A) Subgroup. The Subgroup exposed, for a 21-day public comment

period ending May 1, modifications to VM-51 which add data fields that make Appendix 4 and Appendix 6 consistent with the 2017 data call by the New York State Department of Financial Services and the Kansas Insurance Department. The Subgroup also informed the Task Force of a draft document being developed by the SOA Accelerated Underwriting Experience Data Group that seeks to identify data elements necessary to capture accelerated underwriting mortality experience.

12. Adopted the report of the C-3 Phase II/AG 43 (E/A) Subgroup. 13. Heard an update on SOA research and education, which highlighted SOA studies on mortality experience for payout

annuities, annuities resulting from structured settlements and group annuities. 14. Heard an update from the Academy Council on Professionalism. 15. Heard an update on the May 2017 Academy PBR Boot Camp. HEALTH INSURANCE AND MANAGED CARE (B) COMMITTEE April 9, 2017 1. Heard a federal legislative and regulatory update, which included information concerning the U.S. Congress’ efforts in

the repeal, replace and/or repair of the federal Affordable Care Act (ACA). 2. Heard an update on the Robert Wood Johnson Foundation (RWJF)/Manatt Data Transparency Project and SERFF’s role

with respect to qualified health plan (QHP) filings as part of the project’s goal to enhance data transparency.


3. Heard an update from the Center on Health Insurance Reforms (CHIR) on its work related to the ACA. The update included information on the CHIR’s ongoing work, which is being conducted with funding from the Commonwealth Fund and the RWJF. This work includes new analyses and publications related to: a) current and potential federal legislative ACA-related proposals, such as association health plans, and the possible implications of such proposals to consumers and the states; b) potential federal administrative actions, such as proposals to eliminate essential health benefits (EHBs) and the loss of cost-sharing reductions in the ACA marketplace, and the possible implications of such actions to consumers and the states; and c) state legislative and regulatory action. The CHIR’s future work will include examining such issues as insurance sales across state lines; and expanding health savings accounts (HSAs). The CHIR also plans to update its small group market paper, which was initially published in 2015.

4. Heard a panel discussion from representatives of health insurers, actuaries and consumers on federal legislative and regulatory proposals related to ACA repeal, replacement and/or repair. The discussion focused on recommendations each stakeholder group had for stabilizing the individual market, such as continuing uninterrupted the cost-sharing reduction (CSR) funding and finalizing the federal Center for Consumer Information and Insurance Oversight’s (CCIIO) proposed market stabilization rule.

5. Adopted its March 16 and Feb. 15, 2017, and 2016 Fall National Meeting minutes. During the March 16 and Feb. 15 meetings, the Committee took the following action: a. Adopted revisions to Model #10. The revisions incorporate the 2016 Cancer Claim Cost Valuation Tables, replacing

the current 1985 Cancer Claim Cost Tables. These revisions were adopted by the Executive (EX) Committee and Plenary during its meeting on April 11.

b. Discussed the Committee’s 2017 planned activities, which will include a focus on federal legislative and regulatory proposals related to ACA repeal, replacement and/or repair.

c. Received updates on its task forces’ 2017 planned activities. 1. The Health Actuarial (B) Task Force plans, through two of its subgroups, to continue work related to more

uniform LTC insurance rate reviews among the states and work on stand-alone LTC insurance asset adequacy. In addition, the Task Force’s Health Care Reform Actuarial (B) Working Group will be tasked with reviewing any legislation and proposed regulations from an actuarial perspective related to ACA repeal, replace and/or repair.

2. The Regulatory Framework (B) Task Force plans to continue its work to review and consider revisions to Model #170 and Model #171. The Task Force, through the Model #22 (B) Subgroup, will continue its work on revisions to Model #22. The Task Force also would be involved in any ACA repeal, replacement and/or repair activities that would affect existing NAIC models.

3. The Senior Issues (B) Task Force plans, through the Long-Term Care Innovation (B) Subgroup, to develop realistic policy options for Congress, the states and the NAIC to consider for addressing ways consumers can finance their future LTC needs. The Task Force will monitor state adoption of the NAIC’s recently adopted changes to the Model Regulation to Implement the NAIC Medicare Supplement Insurance Minimum Standards Model Act (#651) required by the federal Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). The Task Force also recently established a new subgroup to develop a new NAIC model to address LTC insurance policies of short duration.

6. Adopted the following reports: Consumer Information (B) Subgroup, including its Dec. 16, 2016, minutes; Health Actuarial (B) Task Force; Regulatory Framework (B) Task Force; and Senior Issues (B) Task Force, which included disbanding the Medigap (B) Subgroup and the Long-Term Care Consumer Disclosure (B) Subgroup.

7. Adopted the Senior Issues (B) Task Force’s recommendations developed by the Long-Term Care Innovation (B) Subgroup for federal policy options to be presented to Congress for potentially increasing the number of affordable asset protection product options available for middle-income Americans for the financing of their LTC needs. The recommendations will be forwarded to the Government Relations (EX) Leadership Council for its consideration.

8. Adopted the Health Actuarial (B) Task Force’s request for an extension of model law development for Model #10 concerning revisions to reflect appropriate LTC insurance reserving standards.

9. Adopted the April 8 report of the Health Care Reform Regulatory Alternatives (B) Working Group, which included the following action: a. Heard a presentation on the Wisconsin Medicaid Program, which included a discussion of: the program’s coverage

structure in the past and currently; and the federal reform funding considerations, such as a block grant funding, per capita enrollment funding or a hybrid of the two.

b. Heard a presentation on the New Hampshire Medicaid Program and Medicaid expansion, including the impact of its expansion on the individual market and the resulting strengthened relationship and coordination between the Medicaid agency and the state insurance department.

c. Heard a presentation on the ACA Section 1332 waivers from Alaska and Oklahoma. Alaska described its process and reasons that led up to it applying for a waiver related to its reinsurance program. Oklahoma described its legislative process and its activities in preparation for submitting a waiver application within the next few months.


Health Actuarial (B) Task Force April 7, 2017 1. Adopted the report of the Health Care Reform Actuarial (B) Working Group, which included the following action:

a. Heard an update from the Academy on federal health care reform developments. b. Heard an update from the SOA on federal health care reform research. c. Heard an update from the federal Center for Consumer Information and Insurance Oversight (CCIIO) on 2018 ACA

rate review requirements. 2. Adopted its Feb. 24 minutes, which included the following action:

a. Adopted its 2016 Fall National Meeting minutes. b. Adopted amendments to Model #10 to incorporate the 2016 Cancer Claim Cost Valuation Tables.

3. Adopted the Dec. 22, 2016, minutes of the Cancer Claims Cost Tables (B) Subgroup, which included the following action: a. Exposed, for a public comment period ending Feb. 1, draft amendments to Model #10 to incorporate the

2016 Cancer Claim Cost Valuation Tables. 4. Adopted the April 7 report of the Long-Term Care Actuarial (B) Working Group, which included the following action:

a. Adopted its 2016 Fall National Meeting minutes. b. Heard an update on the Academy Long-Term Care Valuation Work Group activities. c. Adopted the report of the Long-Term Care Pricing (B) Subgroup. The Subgroup discussed a summary of comments

on a list of eight questions to state insurance regulators concerning how LTC insurance rate increase requests are evaluated, which will be discussed further on future conference calls.

d. Adopted the report of the Long-Term Care Valuation (B) Subgroup, which included the following action: 1. Discussed a revised proposal for a new actuarial guideline with directions for stand-alone asset adequacy testing

for blocks of LTC insurance. 2. Exposed the revised actuarial guideline proposal for a 30-day public comment period.

e. Heard an update from the SOA on LTC insurance research, which included discussion of the SOA Long-Term Care Think Tank’s work on developing LTC insurance innovations that will meet consumer needs.

5. Disbanded the Long-Term Care Guidance Manual (B) Subgroup. The Subgroup completed its work to monitor and provide assistance to the states on the implementation of the 2000 and 2014 rating practices amendments to Model #641, and the model bulletin adopted by the NAIC in December 2013 regarding alternative filing requirements for LTC premium rate increases. On April 8, the Senior Issues (B) Task Force also voted to disband this joint Subgroup.

6. Exposed a proposal to amend VM-25, Health Insurance Minimum Reserve Requirements, for group long-term disability reserving requirements for a 14-day public comment period ending April 14

7. Heard an update from the Academy Council on Professionalism. 8. Heard an update from the SOA on health insurance research. 9. Heard an update from the Academy Health Practice Council. Regulatory Framework (B) Task Force April 8, 2017 1. Adopted its 2016 Fall National Meeting minutes. 2. Adopted its Feb. 14 minutes, which included the following action:

a. Discussed its plan to continue to consider revisions to Model #170, Model #171 and Model #22. The Task Force agreed that this work would continue to be done through the Accident and Sickness Insurance Minimum Standards (B) Subgroup and the Model #22 (B) Subgroup, respectively.

b. Discussed that the ERISA (B) Working Group continues to complete revisions to the Health and Welfare Plans Under the Employee Retirement Income Security Act: Guide to State and Federal Regulation (ERISA Handbook).

c. Discussed reviewing and revising NAIC models affected by the ACA repeal, replacement or repair proposals. d. Discussed concerns regarding health care sharing ministries.

3. Discussed possible next steps regarding existing NAIC models potentially affected by ACA repeal, replacement or repair proposals and decided to continue the discussion via conference call after the Spring National Meeting.

4. Continued to discuss health care sharing ministries and consumer transparency with respect to these non-insurance products. Decided to continue the discussion on a future conference call and, perhaps, invite a few of these entities to discuss their activities at the Summer National Meeting.

5. Adopted the report of the Accident and Sickness Insurance Minimum Standards (B) Subgroup. The Subgroup has not met since November 2016. The Task Force chair decided to suspend the Subgroup’s meetings in light of the possible repeal, replace or repair of the provisions of the ACA, which could significantly affect the Subgroup’s proposed revisions to Model #170 and Model #171. The Task Force decided to continue to suspend the Subgroup’s meeting for the time being and discuss it again at the Summer National Meeting.


6. Adopted the report of the Model #22 (B) Subgroup, including its March 2 and Feb. 14, 2017, and Dec. 10 and Nov. 29, 2016, minutes. The Subgroup took the following action: a. Adopted its Nov. 15, Nov. 1, Oct. 25, Oct. 13 and 2016 Summer National Meeting minutes. b. Discussed the decision in the case of Pharmaceutical Care Management Association (PCMA) v. Gerhart and what

impact, if any, the decision has on the Subgroup’s work to revise Model #22. After discussion, the Subgroup decided that the decision does not impact its work, because the Iowa law regulating pharmaceutical benefit managers (PBMs) found to be preempted under the federal Employee Retirement Income Security Act (ERISA) differs greatly from the provisions in Model #22.

c. Continued its discussion of the comments received on Model #22 and made preliminary decisions on what revisions to include in an initial draft of proposed revisions to the model. Specifically, the Subgroup discussed Section 5—Requirements for the Development and Maintenance of Prescription Drug Formularies and Other Pharmaceutical Benefit Management Procedures and Section 6—Information to Prescribers, Pharmacies, Covered Persons and Prospective Covered Persons.

d. Discussed revised language based on the Subgroup’s discussions during its Dec. 10, 2016, meeting for Model #22, Section 5—Requirements for the Development and Maintenance of Prescription Drug Formularies and Other Pharmaceutical Benefit Management Procedures. Preliminarily agreed to include the draft revised language for Section 5 in the initial draft of proposed revisions to Model #22.

e. Continued discussion of proposed revisions to Model #22, Section 6. The Subgroup specifically discussed draft language based on its Dec. 10, 2016, meeting and its March 2 conference call for inclusion in Section 6 requiring carriers to provide a complete, current and accurate prescription drug formulary list and other prescription drug benefit information electronically or in some other manner. The Subgroup met March 28 via conference call to review new draft language based on its March 2 discussions intended to clarify disclosure requirements related to the formulary list and other prescription drug benefit information based on whether such information is related to a health benefit plan issued in the individual market or issued in the group market. The Subgroup plans to continue its discussions of the draft language April 25 via conference call.

7. Adopted the report of the ERISA (B) Working Group, including its 2016 Fall National Meeting minutes. The Working Group exposed revised drafts of proposed revisions to several sections of the ERISA Handbook based on the comments received on previous drafts, and set a Jan. 31 public comment deadline on its exposure of the revised drafts. The Working Group plans to meet via conference call after the Spring National Meeting to discuss any comments received.

Senior Issues (B) Task Force April 8, 2017 1. Adopted its 2016 Fall National Meeting minutes. 2. Discussed whether to extend the five-year moratorium on re-entering the Medicare supplement (Medigap) market to all

legal entities associated with a company or parent organization after a plan of any one of those entities is closed to new sales. The Task Force decided to conduct a state survey on the issue before making any decisions.

3. Adopted the report of the Long-Term Care Innovation (B) Subgroup, including its April 3, March 23 and Feb. 21, 2017, and Dec. 19, 2016, minutes.

4. Adopted the report of the Short Duration Long-Term Care Policies (B) Subgroup, including its March 29 minutes. 5. Adopted an LTC federal policy options document and referred it to the Health Insurance and Managed Care (B)

Committee for consideration. The Long-Term Care Innovation (B) Subgroup developed a list of federal policy options for Congress to consider in the hope of increasing private LTC financing options for consumers. The Subgroup adopted these options on April 3.

6. Disbanded the Long-Term Care Consumer Disclosure (B) Subgroup. The Subgroup completed its work to update the consumer disclosure and protection provisions in the Long-Term Care Insurance Model Act (#640) and the Long-Term Care Insurance Model Regulation (#641). The Executive (EX) Committee and Plenary adopted the revisions at the 2016 Summer National Meeting.

7. Disbanded the Medigap (B) Subgroup. The Subgroup completed its work on revisions to Model #651 pursuant to the passage of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), Public Law 114-10. The Executive (EX) Committee and Plenary adopted the revisions at the 2016 Fall National Meeting.

8. Disbanded the Long-Term Care Guidance Manual (B) Subgroup. The Subgroup completed its work to monitor and provide assistance to the states on the implementation of the 2000 and 2014 rating practices amendments to Model #641, and the model bulletin adopted by the NAIC in December 2013 regarding alternative filing requirements for LTC premium rate increases. On April 7, the Health Actuarial (B) Task Force also voted to disband this joint Subgroup.

9. Heard an update on federal legislative matters. The update included a report on the status of the federal appropriations process as it relates to the funding for the State Health Insurance Assistance Programs (SHIPs).

10. Heard the IIPRC’s request regarding the issue of non-duplication or management of benefits under multiple LTC policies.


PROPERTY AND CASUALTY INSURANCE (C) COMMITTEE April 10, 2017 1. Adopted its 2016 Fall National Meeting minutes. 2. Adopted the following task force and working group reports: Casualty Actuarial and Statistical (C) Task Force; Surplus

Lines (C) Task Force; Title Insurance (C) Task Force; Workers’ Compensation (C) Task Force; Creditor-Placed Insurance Model Act Review (C) Working Group; Public Adjuster (C/D) Working Group; Risk Retention (C) Working Group; Terrorism Insurance Implementation (C) Working Group; and Transparency and Readability of Consumer Information (C) Working Group.

3. Adopted an extension for revisions to Model #375. 4. Heard from Commissioner Teresa D. Miller (PA); Commissioner David Altmaier (FL); Commissioner James J. Donelon

(LA); Commissioner Jim L. Ridling (AL); and Joel Laucher (CA) regarding recent flooding in their states and activities related to the private market writing flood risk.

5. Adopted revisions to A Consumer’s Guide to Home Insurance and A Shopping Tool for Homeowners Insurance to include information regarding sharing economy applications.

6. Heard a presentation from Insurance Services Office (ISO) regarding ISO’s Public Protection Classification and how fire department ratings are updated and revised.

7. Heard a federal update including information on the reauthorization of the National Flood Insurance Program (NFIP). 8. Heard an update on the Travel Insurance (C) Working Group’s review of proposed amendments to the National

Conference of Insurance Legislators (NCOIL) Travel Insurance Model Act. 9. Decided that the Post-Catastrophe Regulatory Guidance (C) Subgroup will become a part of the Catastrophe Response

(C) Working Group. The Committee also heard that 2017 charges having to do with autonomous vehicles, on-demand applications and other innovations have been moved to the new Innovation and Technology (EX) Task Force.

10. Heard a report on prior recommendations related to potential modernization of commercial lines rates and forms regulation. The Committee will look into these issues in greater detail through an ad hoc group of state insurance regulators.

11. Heard a presentation from the Property Casualty Insurers Association of America (PCI) recommending a set of standards for regulators to use prior to the issuance of data calls.

12. Adopted the April 8 report of the Auto Insurance (C/D) Working Group, which included the following action: a. Adopted its 2016 Fall National Meeting Minutes. b. Discussed comments received on proposed data collection. c. Directed the NAIC to move forward with data collection to be used in a market assessment of the auto insurance

industry. The Working Group will meet to further refine data elements needed to achieve this task. 13. Adopted the report of the Advisory Organization Examination Oversight (C) Working Group. The Working Group met

April 8 in regulator-to-regulator session pursuant to paragraph 3 (specific companies, entities or individuals) of the NAIC Policy Statement on Open Meetings and took the following action: a. Adopted its 2016 Fall National Meeting minutes. b. Received a status report on company exams in progress. c. Reviewed and discussed the 2017 exam calendar. d. Discussed the Comprehensive Annual Analysis (CAA) process. e. Heard comments from advisory organizations and statistical agents. f. Discussed revisions to Chapter 25—Conducting the Advisory Organization Examination of the Market Regulation

Handbook. 14. Adopted the April 10 report of the Catastrophe Insurance (C) Working Group, which included the following action:

a. Adopted its 2016 Fall National Meeting minutes. b. Heard updates regarding federal legislation and the NFIP. The NFIP has completed its draft of a reference handbook

for regulators, which will be distributed to the Working Group for comments. The current NFIP reauthorization expires on Sept. 30, 2017, and Congress has conducted three hearings in the past month to consider potential changes and improvements to the program. The federal banking regulators continue to work on their rulemaking to implement the private flood insurance provisions of federal Biggert-Waters Flood Insurance Reform Act of 2012. President Donald Trump’s preliminary budget request proposes restricting user fees for the NFIP and eliminating the NFIP Flood Hazard Mapping Program.

c. Adopted the report of the Post-Catastrophe-Regulatory Guidance (C) Subgroup, including its Feb. 22 minutes. The Property and Casualty Insurance (C) Committee will consider combining the Subgroup with the Catastrophe Response (C) Working Group. The groups have been meeting jointly for the past three national meetings. The Subgroup is close to completing its charge and will likely consider adoption of the “Catastrophic Event/Emergency Measures” document prior to the Summer National Meeting.

d. Adopted the report of the Consumer Outreach and Assistance Post-Disaster (C) Subgroup. The Subgroup has not met since the 2016 Fall National Meeting.


e. Heard a presentation from United Policyholders regarding state insurance regulator engagement in short- and long-term disaster recovery. The presentation included information regarding challenges for affected property owners following a catastrophic event and ways an insurance department can assist consumers.

f. Heard a presentation from Wildfire Partners regarding increasing mitigation against wildfires. Wildfire Partners works with homeowners to take action in advance of a wildfire and mitigate their homes to deter a total loss.

g. Heard a presentation from the Center for Neighborhood Technology (CNT) regarding its urban flooding study. The CNT proposed partnering with the NAIC to collect flood damage claims data at a census block level.

h. Received an update regarding conversations with the NFIP regarding a data collection effort. The Working Group sent a request to the NFIP asking for a variety of data elements. Once a response is received from the NFIP, the Working Group plans to meet via conference call to discuss the response.

15. Adopted the April 8 joint report of the Catastrophe Response (C) Working Group and the Post-Catastrophe Regulatory Guidance (C) Subgroup, which included the following action: a. Adopted its 2016 Fall National Meeting minutes. b. Heard updates regarding recent catastrophic events from California, Florida, Georgia, Louisiana, North Carolina,

Mississippi, Missouri, and Tennessee. Each of the states reported on loss amounts, as well as lessons learned regarding the catastrophic events occurring in their respective states.

c. Discussed the “Catastrophic Event/Emergency Measures” document updated by the Post-Catastrophe Regulatory Guidance (C) Subgroup during its Feb. 22 conference call. The Working Group will meet via conference call after the national meeting to consider adoption of the latest draft “Catastrophic Event/Emergency Measures” document.

16. Adopted the April 8 report of the Climate Change and Global Warming (C) Working Group, which included the following action: a. Adopted its 2016 Fall National Meeting minutes. b. Heard a presentation from the National Fire Protection Association (NFPA) on its Firewise USA Program. Firewise

is a community action network focused on changing local behavior to reduce wildfire risk. Communities from 42 states, representing more than 1.5 million residents, participate in Firewise.

c. Heard a presentation from Wildfire Partners on its home certification program to help homeowners in Colorado’s Boulder County prepare for wildfire. The program is a public-private partnership that focuses on mitigation at the parcel level.

d. Heard a presentation from USAA on its partnerships with Firewise and Wildfire Partners. USAA offers a 50% discount on the wildfire peril premium for Firewise communities in seven states. USAA also writes fire coverage for all homes certified by Wildfire Partners.

e. Heard a panel discussion on the use of public-private mitigation programs to improve affordability and availability of insurance coverage for the fire peril. Discussions highlighted the active role insurers are playing in this space. Additionally, homeowners’ ability to maintain insurance coverage or receive a discount on premium was identified as a key incentive to mitigating the fire peril.

17. Adopted the April 8 report of the Crop Insurance (C) Working Group, which included the following action: a. Adopted its Nov. 28, 2016, minutes, which included presentations from the U.S. Department of Agriculture Risk

Management Agency (RMA) regarding its transition to a new administration; and the National Crop Insurance Services (NCIS) regarding the Crop Adjuster Proficiency Program (CAPP).

b. Heard a presentation from the RMA regarding updates to the federal program and budget initiatives. c. Heard from the NCIS regarding crop insurance written in 2016 and CAPP adjuster schools planned for 2017.

18. Adopted the April report of the Earthquake (C) Study Group, which included the following action: a. Adopted its Fall National Meeting minutes. b. Heard a presentation from AIR Worldwide on updates and enhancements to the AIR U.S. Earthquake Model, which

will be released this summer. The model incorporates new information for regional tectonic hazards and the influences of human behavior in inducing seismicity in the central U.S. The updates also include innovative methods for modeling risk due to ground motion shaking and the following four sub-perils: fire following earthquake; liquefaction; landslide; and Pacific coast tsunami.

19. Adopted the April 9 report of the Medical Professional Liability (C) Working Group (f.k.a. Affordable Care Act Medical Professional Liability (C) Working Group), which included the following action: a. Adopted its Dec.1, 2016, minutes, which included discussion of its 2017 proposed charge and an approach to

information-sharing with other entities collecting medical professional liability-related data. b. Announced the Working Group’s name had changed from the Affordable Care Act Medical Professional Liability

(C) Working Group to the Medical Professional Liability (C) Working Group to better reflect what the Working Group is currently working on related to data collection, but does not prevent continued monitoring of activity on the health care front.

c. Discussed surveying the states to determine what data elements related to medical malpractice claims are currently being collected and for what purpose.


20. Adopted the April 8 report of the Sharing Economy (C) Working Group, which included the following action: a. Adopted its Nov. 28 and Nov. 18 minutes, which included the following action:

1. Adopted its Oct. 11 minutes, during which the Working Group discussed: a) comments regarding its draft home-sharing white paper; and b) the availability of consumer materials regarding the sharing economy.

2. Adopted its home-sharing white paper, Insurance Implications of Home-Sharing: Regulator Insurance and Consumer Awareness. Heard presentations from: a) the NAIC Communications Department regarding its sharing economy consumer outreach campaign; and b) the New York State Department of Financial Services regarding Lemonade Insurance Company.

b. Heard a presentation from NAIC staff regarding state laws relative to transportation network companies. c. Heard a presentation from Aon regarding insurance products available to sharing economy companies.

21. Adopted the April 9 Terrorism Insurance Implementation (C) Working Group, which included the following action: a. Adopted its 2016 Fall National Meeting Minutes. b. Received a federal update, including information on the Federal Insurance Office’s (FIO) final rule implementing

financial and operational changes required by the federal Terrorism Risk Insurance Program Reauthorization Act of 2015 (TRIA); FIO guidance clarifying that stand-alone cyber liability insurance policies are included under TRIA; the FIO’s data collection for 2017; and the U.S. Government Accountability Office (GAO) report reviewing alternative funding approaches for TRIA.

c. Discussed the state insurance regulator terrorism risk insurance data call for 2017. The states plan to collect 2014 workers’ compensation data in the summer and 2015 workers’ compensation data later in the year. The states plan to collect 2016 data for the other lines of business in the fall. State insurance regulators encouraged the industry to communicate ways that definitions or instructions could be improved.

d. Heard comments from the industry about the desire for states to coordinate with the FIO to avoid duplicative data calls. State insurance regulators reiterated that they would like to share data with the FIO and avoid duplication.

22. Adopted the April 7 report of the Travel Insurance (C) Working Group, which included the following action: a. Adopted its March 1 minutes, which included a presentation from Tom Considine (NCOIL) on the proposed

amendments to the NCOIL Travel Insurance Model Act (NCOIL model). b. Heard an update from Mr. Considine regarding the proposed amendments to the NCOIL model since it was

presented to the Working Group on March 1 that were included in the version adopted by NCOIL. c. Heard presentations and received comments from industry and consumer representatives on the amended NCOIL

model. The presentations covered information related to the travel insurance and travel services offerings for consumers, competitiveness of the market, bundling of travel insurance with travel services and some specific concerns regarding the NCOIL model. Support for the NCOIL model was expressed by the United States Travel Insurance Association (UStiA), the American Insurance Association (AIA), the Tourism & Travel Industry Consumer Coalition (TTICC) and the United States Tour Operators Association (USTOA) and for using it as a basis for the Working Group’s deliberations going forward.

d. Discussed how to move forward with its charge and decided issues raised to date will be discussed, including a review of the NCOIL model language on a conference call to be held every other week.

Casualty Actuarial and Statistical (C) Task Force April 9, 2017 1. Adopted its March 14 and Feb. 14 minutes, which included adoption of its 2016 Fall National Meeting minutes. 2. Adopted the report of the Actuarial Opinion (C) Working Group, including its Jan. 31, 2017, and Dec. 20, 2016, minutes.

Action taken includes adoption of a proposal to the Blanks (E) Working Group to modify instructions for the 2017 P/C Statement of Actuarial Opinion, the 2017 P/C Actuarial Opinion Summary and the 2017 title Statement of Actuarial Opinion.

3. Adopted a comment letter on the Actuarial Standard Board’s (ASB) third exposure draft Actuarial Standard of Practice (ASOP), Estimating Future Costs for Prospective Property/Casualty Risk Transfer and Risk Funding.

4. Discussed results from a state survey regarding how states review rate filings based on generalized linear models (GLMs). The Task Force continued to encourage NAIC training on predictive modeling and might take further action after training. The Task Force discussed the predictive modeling training at the NAIC/NIPR Insurance Summit in May.

5. Discussed NAIC activities relating to casualty actuarial issues. It was suggested by an interested party to consider a process where the Task Force’s Statistical Data (C) Working Group would receive referrals or be consulted on all P/C statistical data requests from the Property and Casualty Insurance (C) Committee’s task forces, working groups and subgroups.

6. Heard reports from the Academy regarding the activities of its Committee on Property and Liability Financial Reporting (COPLFR), its Council on Professionalism and its Casualty Practice Council.

7. Heard reports from the Casualty Actuarial Society (CAS) and the SOA on P/C actuarial research.


Surplus Lines (C) Task Force April 8, 2017 1. Adopted its 2016 Fall National Meeting minutes. 2. Adopted the report of the Surplus Lines (C) Working Group, which included a determination of “home state” for

unaffiliated groups. 3. Adopted the 2016 federal Terrorism Risk Insurance Act (TRIA) form. 4. Heard an update on domestic surplus lines insurer reporting on state insurance department websites and through

State Based Systems (SBS). Title Insurance (C) Task Force April 8, 2017 1. Adopted its 2016 Fall National Meeting minutes. 2. Adopted the report of the Title Insurance Financial Reporting (C) Working Group, which included the following action:

a. Adopted its Jan. 26 minutes, which included the following action: 1. Exposed a title annual financial statement instructions proposal regarding the Statement of Actuarial Opinion. 2. Discussed the possibility of having NAIC staff create a summary report of annual financial statement

information for title insurance companies. 3. Adopted the report of the Title Affiliated Business Process Review (C) Working Group, which included the following

action: a. Adopted its March 23, Feb. 22, Jan. 24 and Jan. 4 minutes, which included the following action:

1. Discussed the feasibility of developing effective consumer disclosures related to affiliated business arrangements (AfBAs).

2. Adopted suggested revisions to Chapter 18—Conducting the Title Insurance Company and Title Insurance Agent Examination of the Market Regulation Handbook.

4. Adopted the Title Affiliated Business Process Review (C) Working Group’s recommendation to send a referral memorandum to the Market Regulation and Consumer Affairs (D) Committee regarding suggested revisions to Chapter 18 of the Market Regulation Handbook.

5. Adopted the report of the Title Insurance Consumer Shopping Tools (C) Working Group, which included the following action: a. Adopted its March 21 and Jan. 25 minutes, which included adoption of the Title Insurance Consumer Shopping

Tool. 6. Adopted the Title Insurance Consumer Shopping Tool. 7. Heard a presentation from the American Land Title Association (ALTA) regarding the status of ALTA initiatives,

cybersecurity, information-sharing and innovation in mortgage finance. 8. Discussed recent and prospective innovations in the title insurance industry and opportunities for modernization. Workers’ Compensation (C) Task Force April 10, 2017 1. Adopted its 2016 Fall National Meeting minutes. 2. Adopted the report of the NAIC/IAIABC Joint (C) Working Group. The 2016 Workers’ Compensation Large

Deductible Study is available from the NAIC Publications Department at no charge. The Working Group will meet in May at the National Council on Compensation Insurance (NCCI) Annual Issues Symposium.

3. Heard a presentation from NAIC staff on opt-out legislation proposed in various state legislative sessions. In 2017, no additional states have proposed opt-out legislation.

4. Heard a presentation from the NCCI and NAIC staff on air ambulance use and the financial impact on workers’ compensation. NCCI has state specific data available and will supply it upon written request.

5. Heard a presentation from the Workers Compensation Research Institute (WCRI) on its “Evaluation of the 2015 and 2016 Fee Schedule Changes in Delaware.” The report provides a good example of the impact on costs a change to fee schedules can provide.

MARKET REGULATION AND CONSUMER AFFAIRS (D) COMMITTEE April 10, 2017 1. Adopted its March 6 minutes, which included the following action:

a. Adopted its 2016 Fall National Meeting minutes. b. Adopted revised charges for the Producer Licensing (D) Task Force. c. Appointed the Market Conduct Annual Statement Blanks (D) Working Group and the Pre-Dispute Mandatory

Arbitration Clauses (D) Working Group. d. Discussed the Voluntary Market Regulation Certification Program.


2. Adopted a two-year pilot program for the Voluntary Market Regulation Certification Program. The Certification Program generally sets forth market conduct standards regarding state statutory authorities, staffing resources and qualifications; and interstate collaboration through participation in NAIC market regulation working groups and use of NAIC market information systems. The pilot program is designed to address any outstanding concerns expressed by NAIC members. The pilot program seeks 12 jurisdictions to volunteer for 2017, with an additional six jurisdictions to volunteer in 2018. Volunteer jurisdictions will receive up to $5,000 annually for market conduct staff to attend NAIC meetings.

3. Adopted revisions to Chapter 25—Conducting the Advisory Organization Examination of the Market Regulation Handbook, which includes adding a section on acceptance of the examination report by participating examination states.

4. Adopted revisions to the Comprehensive Annual Analysis (CAA) information request. These revisions primarily focus on the addition of instructions for companies completing the CAA form, which is used to keep state insurance regulators informed of changes in a company’s business during the past yearly reporting cycle.

5. Adopted revisions to the NAIC Guidelines for State Insurance Regulators to the Violent Crime Control and Law Enforcement Act of 1994 to provide revised guidance to the states on the coordination of U.S.C. § 1033 consent requests, denials and approvals.

6. Appointed the Uniformity (D) Working Group; the Uniform Education (D) Working Group; and the Independent Adjuster Licensing (D) Working Group, which will report to the Producer Licensing (D) Task Force.

7. Disbanded the Privacy Disclosures (D) Working Group pending the NAIC membership’s adoption of revisions to Model #672. The proposed revisions were adopted April 11 by the Executive (EX) Committee and Plenary.

8. Adopted edits and clarifications for the life Market Conduct Annual Statement (MCAS) data elements and definitions. 9. Adopted the reports of its task forces and working groups: Antifraud (D) Task Force; Market Information Systems (D)

Task Force; Producer Licensing (D) Task Force; Market Regulation Certification (D) Working Group; Market Conduct Examination Standards (D) Working Group; Market Actions (D) Working Group; Market Analysis Procedures (D) Working Group; Market Conduct Annual Statement (D) Working Group, Pre-Dispute Mandatory Arbitration Clauses (D) Working Group; Privacy Disclosures (D) Working Group; and Auto Insurance (C/D) Study Group.

10. Heard a presentation from John Finston (CA) and Amy Bach (United Policyholders) on the unanimous California Supreme Court decision upholding the authority of Commissioner Dave Jones (CA) to enact replacement cost regulation. The regulation sets forth requirements and standards regarding how an insurance company determines replacement cost coverage limits.

11. Received comments from Commissioner Stephen W. Robertson (IN) regarding insurers’ use of cell phone tower data to identify the location of claimants, including the potential for this data to be inaccurate and negatively impact insurance consumers during the claims settlement process.

12. Received an update on technical revisions to the Market Regulation and Consumer Affairs (D) Committee’s 2017 charges to reflect that the Big Data Working Group no longer reports to this Committee. Additionally, the reference to the International Insurance Relations (EX) Leadership Group was changed to reference the International Insurance Relations (G) Committee.

13. Adopted the April 7 report of the Market Analysis Procedures (D) Working Group, which included the following action: a. Adopted its March 9 minutes, which included the following action:

1. Adopted its 2016 Fall National Meeting minutes. 2. Reviewed its 2017 charges. 3. Discussed the Center for Economic Justice (CEJ) proposal to add credit life reporting to the MCAS. 4. Discussed updates to the Procedure for Selecting New MCAS Lines of Business document.

b. Discussed the CEJ proposal to add credit life reporting to the MCAS. c. Discussed updates to the Procedures for Selecting New MCAS Lines of Business document. d. Exposed and discussed proposed edits to the 2018 health MCAS blank and definitions. Comments are to be

submitted no later than April 28. The proposed edits include: the addition of prior authorization data elements related to mental health benefits, behavioral health benefits and substance use disorders benefits; the addition of prior authorization data elements for pharmacy only; and the addition of data elements to capture claims that are denied, rejected or returned according to the reasons for the denial, rejection or return.

Antifraud (D) Task Force April 9, 2017 1. Adopted its 2016 Fall National Meeting minutes. 2. Heard a presentation on the “Changing Attitudes towards Insurance Fraud,” which focused on how different generations

view the severity of insurance fraud differently, and on how fraud education and awareness is crucial in fighting fraud. 3. Adopted the report of the Antifraud Training and Seminar (D) Working Group, which included information about its

future projects for 2017.


4. Adopted the report of the Antifraud Technology (D) Working Group, which included an update on the Online Fraud Reporting System (OFRS) potential budget request for 2018 to rewrite OFRS to ensure that cybersecurity measures are current. The Working Group provided information on insurance fraud referrals and work towards creating a guideline for the industry to follow.

5. Adopted revisions to the 18 U.S.C. § 1033 waiver language found in Section 5(H)(3) of the Guidelines for State Insurance Regulators to the Violent Crime Control and Law Enforcement Act of 1994 in order to achieve a uniform approach to 1033 Notifications.

6. Heard reports on antifraud activity from NAIC staff and representatives from the Coalition Against Insurance Fraud (CAIF) and the National Insurance Crime Bureau (NICB).

Market Information Systems (D) Task Force April 8, 2017 1. Adopted its 2016 Fall National Meeting minutes. 2. Adopted the report of the Market Information Systems Research and Development (D) Working Group. The Working

Group met March 21 in regulator-to-regulator session, pursuant to paragraph 3 (specific companies, entities or individuals) and paragraph 6 (consultation with NAIC staff) of the NAIC Policy Statement on Open Meetings, and took the following action: a. Adopted recommendations to move forward to application development for Uniform System Enhancement Request

(USER) form 10059: Market Analysis Review System (MARS) – improved iSite navigation and USER form 10076: MCAS Market Analysis Prioritization Tool (MAPT) – add non-standard interrogatory data to auto and homeowner.

b. Adopted a recommendation to move forward to detailed analysis for USER form 10075: MAPT – include current year and previous two years of Overall Score, National Score and State Score, as well as main component and sub-component scores.

c. Discussed and requested additional detailed analysis for USER form 10066: MARS – merge Level 1 and Level 2 and 10074: MARS – allow for comments to be added to a Level 1 review after it has been approved.

d. Reviewed the status of outstanding USER forms. e. Previewed preliminary Market Information System (MIS) data analysis metrics results in 2016 year-end.

3. Reviewed outstanding USER forms. 4. Discussed next steps to make public data more meaningful and widely available. 5. Discussed the Complaint Reconciliation Process and directed NAIC staff to conduct a state survey to assess the states’

processes. Producer Licensing (D) Task Force April 8, 2017 1. Announced that the charges for the disbanded Producer Licensing (EX) Task Force were moved to the Producer

Licensing (D) Task Force and that the Producer Licensing (EX) Working Group was disbanded. 2. Adopted its 2016 Fall National Meeting minutes and the Producer Licensing (EX) Working Group’s 2016 Fall National

Meeting minutes. 3. Received a report from the disbanded Producer Licensing (EX) Working Group, which took the following action:

a. Discussed a proposal to eliminate pet insurance as a core limited line of insurance. b. Referred a recommendation to the Antifraud (D) Task Force for revisions to the NAIC Guidelines for State

Insurance Regulators to the Violent Crime Control and Law Enforcement Act of 1994. c. Discussed business entity affiliations. d. Discussed state compliance with Uniform Licensing Standard 10 – Exam Content and Testing Administration. e. Adopted revisions to the “NAIC Prelicensing Education Standardized Terms and Definitions” document. f. Discussed revisions to the “Recommended Topics Approved/Not Approved for Continuing Education (CE) Credit”

document. g. Discussed independent adjuster licensing

4. Appointed the Uniformity (D) Working Group, with California as chair, to address charges E, F, K and L. 5. Appointed the Uniform Education (D) Working Group, with Michigan as chair, to address charges I and G. 6. Appointed the Independent Adjuster Licensing (D) Working Group, with Washington as chair, to address charges

J and L. 7. Heard a report from the NIPR Board of Directors, which is reviewing the license and service agreement with the NAIC,

released its 2016 annual report, released an enhanced licensing platform for producers, and requested the states notify NIPR of any legislative changes that might impact their business rules for the electronic processing of producer licensing transactions.


FINANCIAL CONDITION (E) COMMITTEE April 10, 2017 1. Adopted its 2016 Fall National Meeting minutes. 2. Adopted its March 1 minutes, which included adoption of a proposed membership for the Valuation Analysis (E)

Working Group. 3. Adopted the reports of the following task forces and working groups: Accounting Practices and Procedures (E) Task

Force; Capital Adequacy (E) Task Force; Examination Oversight (E) Task Force; Receivership and Insolvency (E) Task Force; Reinsurance (E) Task Force; Risk Retention Group (E) Task Force; Valuation of Securities (E) Task Force; National Treatment and Coordination (E) Working Group; Risk-Focused Surveillance (E) Working Group; and Variable Annuities Issues (E) Working Group.

4. Received and discussed a summary of recommendations to the Financial Condition (E) Committee from the 2016 Workers’ Compensation Large Deductible Study.

5. Adopted proposed editorial changes to the charges of the Valuation Analysis (E) Working Group. 6. Adopted the April 8 report of the Group Capital Calculation (E) Working Group, which included the following action:

a. Adopted its 2016 Fall National Meeting minutes. b. Adopted its March 22 minutes, which included the following action:

1. Discussed comments received on the two previously exposed approaches to scaling non-U.S. insurers in a group capital calculation.

2. Heard an update on the baseline exercise. 2. Heard a presentation from the American Council of Life Insurers (ACLI) regarding a proposed approach to the

treatment of non-regulated entities for a group capital calculation. 3. Received and exposed a proposed approach to the treatment of U.S. insurers that do not file risk-based capital

(RBC). 7. Adopted the April 8 report of the Group Solvency Issues (E) Working Group, which included the following action:

a. Adopted its 2016 Fall National Meeting minutes. b. Adopted its Feb. 23 minutes, which included the following action:

1. Exposed an updated NAIC Enterprise Risk Report (Form F) Implementation Guide (Implementation Guide) for a public comment period ending March 24.

2. Discussed its 2017 charges. 3. Heard an update on group-related activities at the International Association of Insurance Supervisors (IAIS).

c. Heard an update on group-related activities at the IAIS, which includes the release of consultation drafts on a number of updated Insurance Core Principles (ICPs) and ongoing discussions related to scope of group issues.

d. Adopted the report of the ORSA Implementation (E) Subgroup, which met March 9 in regulator-to-regulator session, pursuant to paragraph 3 (specific companies, entities or individuals) of the NAIC Policy Statement on Open Meetings. The Subgroup’s report included a referral to the Financial Regulatory Standards and Accreditation (F) Committee regarding recommended accreditation guidelines for the review of ORSA Summary Reports.

e. Reviewed and discussed the updated Implementation Guide. During the review, the Working Group received a report from the NAIC Legal Division regarding potential conflicts between the Implementation Guide and the Insurance Holding Company System Regulatory Act (#440) and the Insurance Holding Company System Model Regulation with Reporting Forms and Instructions (#450). The review indicated that some of the language currently included within the Implementation Guide appears to expand the scope of the Form F and may result in conflicts with Model #440 and Model #450.

f. Heard comments from the North American CRO Council and a joint group of interested parties on the Implementation Guide. The comments expressed support for the conclusions of the NAIC Legal Division and encouraged the Working Group to consider other options to address Form F issues, such as education and training. Working Group members discussed several options in moving forward with the project before agreeing to form a drafting group to study the issues further.

8. Adopted the April 9 report of the Mortgage Guaranty Insurance (E) Working Group, which included the following action: a. Adopted its 2016 Fall National Meeting minutes. b. Discussed revisions to the draft Model #630 and directed the Working Group chair to develop a revised draft to

address comments received during the exposure period. The revisions to Model #630 are proceeding as planned and are expected to be completed by the fall of 2017.

c. Heard a summary on the progress and intended timeline for completion of the NAIC mortgage guaranty capital model.


Accounting Practices and Procedures (E) Task Force April 9, 2017 1. Adopted its 2016 Fall National Meeting minutes. 2. Adopted the April 8 report of the Statutory Accounting Principles (E) Working Group, which included the following

action: a. Adopted its March 16 minutes, which included the following action:

1. Exposed one agenda item. 2. Adopted its Jan. 24 minutes. 3. Adopted substantive revisions to Statement of Statutory Accounting Principles (SSAP) No. 35R—Guaranty

Fund and Other Assessments to permit discounting of guaranty fund assessments from insolvencies of insurers that wrote LTC contracts.

b. Adopted substantive revisions to SSAP No. 26R—Bonds and Issue Paper No. 156—Bonds. These revisions, effective Dec. 31, 2017, remove Securities Valuation Office (SVO)-identified instruments from the definition of “bond” and provide separate accounting guidance for these instruments. The revisions also incorporate the definition of “security” within the definition of “bond,” and incorporate definitions for “non-bond, fixed-income instruments.”

c. Adopted the following nonsubstantive revisions to statutory accounting guidance: 1) revisions adopt, with modification, ASU 2016-07 – Simplifying the Transition to the Equity Method of Accounting; 2) revisions incorporate additional disclosures from ASU 2015-09 – Insurance – Disclosures about Short-Duration Contracts not currently captured in statutory accounting, but reject ASU 2015-09; 3) adopt ASU 2016-15 – Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments, with language clarifying the effective date and transition; 4) revisions clarify that the guidance in INT 01-25—Accounting for U.S. Treasury Inflation-Indexed Securities is limited to direct obligations of the U.S. government; 5) revisions incorporate additional language from the Life and Health Reinsurance Agreements Model Regulation (#791) to note that the reinsurance agreement shall constitute the entire agreement and that amendments are required to be signed by all parties to be effective; and 6) provide a new policy statement on coordination with the Valuation Manual.

d. Exposed the following substantive revisions to statutory accounting guidance: 1) exposed agenda item 2016-40, with the intent to dispose without incorporating a definition change for securities in the scope of SSAP No. 43R—Loan-Backed and Structured Securities and directed notification to the Valuation of Securities (E) Task Force of the intent to dispose; and 2) exposed agenda item 2016-03, with revised statutory accounting guidance on the Special Accounting Treatment for Limited Derivatives Hedging Variable Annuity Guarantees that considered prior industry comments with specific comments requested . In addition, directed a request to the Variable Annuities Issues (E) Working Group for input on hedging programs initially captured under the accounting guidance, but are subsequently terminated or ineffective.

e. Exposed the following nonsubstantive revisions to statutory accounting guidance: 1) revisions to expand disclosures for high-deductible policies to facilitate data-capture for year-end 2017; 2) revisions to the definition of “mortgage loan,” as well as examples of mortgage loan investments; 3) proposed expanded disclosures for high-deductible policies to facilitate data-capture for year-end 2017; 4) proposed adoption of ASU 2016-18 – Statement of Cash Flows – Restricted Cash with a year-end 2019 effective date(also requested comments on whether definitions were needed and on retrospective application); 5) revisions provide guidance regarding surplus notes issued at a discount or a premium and incorporate illustrations effective date ; 6) revise the deadlines for Sub 1 and Sub 2 filings and requests comments on the proposed time frames, including whether the proposed time frames will improve compliance with filing requirements; 7) reject ASU 2016-16 – Intra-Entity Transfers of Assets Other than Inventory with a comment request on whether the rejection would create timing differences with U.S. generally accepted accounting principles (GAAP); 8) adopt, with modification, ASU 2016-09 – Improvements to Employee Share-Based Payment Accounting and request comment on the proposed transition guidance and whether transition guidance is needed for non-GAAP companies; 9) revisions to incorporate the 2016 Cancer Claim Cost Valuation Tables into Appendix A-010: Minimum Reserve Standards for Individual and Accident and Health Insurance Contracts;10) reject ASU 2017-06 – Plan Accounting – Master Trust Reporting;11) reject ASU 2017-02 – Clarifying When a Not-for-Profit Entity that is a General Partner or a Limited Partner Should Consolidate a For-Profit Limited Partnership or Similar Entity; 12) reject ASU 2017-03 – Amendments to SEC Guidance; 13) new policy statement describes coordination and collaboration between the Purposes and Procedures Manual of the Investment Analysis Office (P&P Manual) and the Accounting Practices and Procedures Manual (AP&P Manual) and directed notification of the exposure to the Valuation of Securities (E) Task Force; 14) requested input on the impact on the legal settlement of variation margins; 15) exposed agenda item to clarify liability recognition for the cost to acquire derivatives with a deferred or financing premium, as well as to provide disclosures and specific reporting for these premiums along with a request for comments on specific topics and directed notification to the Financial Analysis Research and Development (E) Working Group regarding the current limitations of the financial analysis tools for derivatives with deferred or financing premium; and 16) requested input regarding statutory accounting guidance for


bank loans, focusing on loans directly issued by the reporting entity, and whether such loans should be captured within the scope of SSAP No. 26R and directed referral to the Valuation of Securities (E) Task Force.

f. Disposed agenda item 2013-13: Derivative Investment Reporting without revisions to statutory accounting. g. Adopted a referral response on bond granularity to the Investment Risk-Based Capital (E) Working Group. h. Adopted a referral response to the Valuation of Securities (E) Task Force to communicate the current statutory

accounting guideless for “fund” investments, along with existing reporting requirements. i. Exposed technical changes to the Investments of Insurers Model Act (Defined Limits Version) (#280) to remove the

“Class 1” references and correct the definitions of repurchase and reverse-repurchase agreements. j. Directed NAIC staff to draft revisions to SSAP No. 26R, the asset valuation reserve (AVR) annual financial

statement instructions and the interest maintenance reserve (IMR) annual financial statement instructions to help ensure consistent accounting guidance and annual financial statement instructions.

k. Deferred the Appendix C Introduction agenda item and directed NAIC staff to prepare wording for future discussion.

l. Received information regarding a new process to access updates to the AP&P Manual in order to comply with NAIC cybersecurity initiatives and will improve the ability for users to access the updates without being locked out.

m. Reviewed U.S. GAAP exposures, noting that no comments by the Working Group are planned. n. Announced that the comment deadline for new and exposed items is May 19.

3. Adopted the April 8 report of the Blanks (E) Working Group, which included the following action: a. Adopted an editorial listing. b. Adopted its Dec. 15, 2016, minutes, which included the following action:

1. Adopted the report of the Investment Reporting (E) Subgroup. 2. Adopted three previously exposed blanks proposals: 2016-23BWG Modified; 2016-27BWG Modified; and

2016-28BWG. 3. Exposed seven blanks proposals. 4. Adopted an editorial listing. 5. Discussed the possible elimination of P/C supplements in the health blanks. 6. Approved “decision tree” guidance to be posted the NAIC website to help companies decide whether to file the

Supplemental XXX/AXXX Reinsurance exhibit and its various parts. 7. Received a year-end change memorandum from the Statutory Accounting Principles (E) Working Group.

c. Adopted the report of the Investment Reporting (E) Subgroup. d. Adopted the following items previously exposed:

1. 2016-29BWG – Add instructions for the Life Insurance Policy Locator Service contact. 2. 2016-30BWG – Modify instructions for the Long-Term Care Insurance Experience Reporting Form 5 to

indicate that a grand total page should be filed. Add crosschecks. 3. 2016-31BWG – Reduce the number of collateral type categories from 21 to 10 on Schedule D, Part 1. Add

additional explanations and examples to the categories. 4. 2016-32BWG – Split the Cybersecurity and Identity Theft Insurance Coverage Supplement blank into three

parts (interrogatories, stand-alone policies and packaged policies). Add interrogatory questions and information on claims open, claims closed with payment and claims closed without payment.

5. 2016-33BWG – Modify the appropriate instructions and blank pages to reflect the movement of money market mutual funds from Schedule DA, Part 1 to Schedule E, Part 2.

6. 2016-34BWG – Modify the illustration for Note 12A(3) – Retirement Plans, Deferred Compensation, Postemployment Benefits and Compensated Absences and Other Postretirement Benefit Plans (Defined Benefit Plan) clarifying the funded status for pensions and OPEB financial statement components.

7. 2016-35BWG – Combine the current Schedule F, Part 3, Part 4, Part 5, Part 6, Part 7 and 8 into a single new Schedule F, Part 3 – Ceded Reinsurance. Modify the crosscheck references for line 13 and line 16 of the Liability page to reflect the changes to Schedule F and make changes to Schedule F, Part 1 to eliminate the under $100,000 aggregation for consistency with the changes to Schedule F, Part 3.

e. Exposed 16 new proposals with a comment deadline of May 15. f. Discussed the combining of the life and fraternal blanks and eliminating the separate fraternal blank. The Working

Group directed NAIC staff to draft a blanks proposal showing the changes for combining the two blanks. 4. Discussed that the Task Force received and exposed the referral from the Statutory Accounting Principles (E) Working

Group detailing past discussions regarding, and noting Working Group support for, the Task Force making a policy change that facilitates collection of second-quarter, electronic-only investment information capturing CUSIP, par, book/adjusted carrying value (BACV) and fair value for Schedule D investments. The item is exposed on the Task Force web page, and comments on mid-year data collection referral are due April 14. The Task Force plans to discuss on its May 2 conference call.


Capital Adequacy (E) Task Force April 9, 2017 1. Adopted its 2016 Fall National Meeting minutes. 2. Adopted its Feb. 7, minutes, which included adoption of the 2016 Catastrophe List. 3. Adopted the report of the Operational Risk (E) Subgroup. The Subgroup met March 20 and took the following action:

a. Adopted its Feb. 13 and Jan. 23, 2017, and Dec. 20, 2016, minutes. During these meetings the Subgroup took the following action: 1. Discussed the “add-on” methodology for basic operational risk in 2017 RBC. 2. Discussed deleting informational growth risk lines in the 2017 P/C RBC formula. 3. Reviewed the health RBC growth risk test results. 4. Discussed the P/C RBC growth risk.

b. Adopted structural changes needed to implement and “add-on” methodology. c. Exposed the 2017 factor to be applied in the “add-on” methodology.

4. Received a status update from the ad hoc group regarding the analysis of the affiliate investment page in all formulas (health RBC; P/C RBC and life RBC) in order to clarify the instructions and functionality of the formula page.

5. Adopted a Money Market Mutual Fund (MMMF) proposal based on a referral from the Statutory Accounting Principles (E) Working Group. The Task Force exposed the proposal for a 45-day public comment period ending Jan. 25, received the comments and adopted the proposal based on comments and the recent adoption of the Blanks (E) Working Group inclusion of MMMF on Schedule E, Part 2.

6. Adopted the Medicare Part D proposal based on factor recommendations from the Academy. The proposal changes the reference from “premiums” to “claims incurred” and increases the factor to 50% for all lines of business.

7. Adopted the Stop Loss proposal based on the recommendations from an Academy report, which states that companies writing a smaller block of stop loss business were at a greater risk than those companies writing a larger block. A tiered factor approach applies a 35% factor to the first $25 million and a 25% factor to the remaining premium in excess of $25 million.

8. Adopted the Operational Risk proposal for all lines of business, the Operational Risk (E) Subgroup recommends a capital add-on approach over a proxy-based approach because it broadly covers operational risk across all existing risks.

9. Adopted the Property and Casualty Risk-Based Capital (E) Working Group proposal, which included following item: a. 2016-07-CR – catastrophe risk charge will be implemented from an informational only page into the

RBC calculation. 10. Adopted the Life Risk-Based Capital (E) Working Group proposal, which included the following item:

a. 2017-01-L – RBC Ratio – The proposal adds a new line to show the Authorized Control Level RBC ratio in the Life RBC formula. The Health and P/C formulas both include a line for the RBC ratio so this makes the formulas consistent in that respect.

11. Adopted the April 8 report of the Life Risk-Based Capital (E) Working Group, which included the following action: b. Adopted its March 17 minutes, which included the following action:

1. Adopted its Jan. 10, 2017, and 2016 Fall National Meeting minutes. 2. Adopted proposal 2017-01-L, which adds a new line 7 to LR034, Risk-Based Capital (RBC) Level of Action, to

the life formula to show the RBC ratio. 3. Re-exposed, with modifications, proposal 2017-02-L, the primary security shortfall instructional change

proposal, for a 45-day public comment period ending April 24. 4. Exposed proposal 2017-03-L, the ACLI Federal Home Loan Bank (FHLB) proposal, for a 45-day public

comment period ending April 24. b. Heard an update from the Academy Longevity Risk Task Force. c. Discussed proposal 2017-02-L. d. Discussed proposal 2017-03-L. The ACLI will work to amend the proposal for further consideration based on the

discussion. e. Received an update from the Operational Risk (E) Subgroup. f. Discussed its 2017 working agenda. The Working Group agreed to bring the working agenda item related to stress

testing back to the Working Group. 12. Adopted the April 9 report of the Health Risk-Based Capital (E) Working Group, which included the following action:

a. Adopted its 2016 Fall National Meeting minutes. b. Adopted its Feb. 9 minutes, which included the following action:

1. Referred the Medicare Part D proposal to the Capital Adequacy (E) Task Force. 2. Referred the Academy Stop Loss Report to the Capital Adequacy (E) Task Force. 3. Discussed Medicaid pass-through payments.

c. Discussed the summary of the Medicaid pass-through payment survey results and exposed a draft of the Medicaid pass-through payment mock-up. The Working Group exposed the document for a 30-day public comment period ending May 9.


d. Discussed the following: a) ACA in the health RBC formula on page XR012-A for analysis of the individual, small group and large group data; b) page XR023 modifications for the risk corridor; and c) page XR026 for the ACA Fee Ratio Sensitivity Test. The Working Group asked NAIC staff to begin pulling the data together to review on a future call.

e. Received a status update on the Investment Risk-Based Capital (E) Working Group, which included discussion on the bond granularity for health RBC.

f. Received a status update on the Operational Risk (E) Subgroup, which included discussion on the exposure of implementing an “add-on” methodology of basic operational risk in 2017 and continued discussion on the excessive growth risk charge.

13. Adopted the April 9 report of the Investment Risk-Based Capital (E) Working Group, which included the following action: a. Adopted its 2016 Fall National Meeting minutes. b. Adopted its March 8 and Feb. 16 minutes, which included the following action:

1. Discussed uniformity across all statement type and bond granularity. 2. Received an update from the Academy regarding the model used to determine the factors for the

20 designations. The Academy will rerun the model to provide updated factors. c. Continued its discussion on the bond factors in the life RBC formula, including information in the ACLI proposal.

The Academy will consider any appropriate updates to its model and report its findings to the Working Group on or around June 1.

d. Discussed and exposed the bond granularity for P/C and health RBC. The discussion and exposure also included draft recommendations for electronic-only columns that will be referred to the Blanks (E) Working Group when finalized. The Working Group agreed to expose the proposal for a 45-day public comment period ending May 29.

e. Heard a presentation from ACLI regarding real estate factors for life RBC. The Working Group agreed to expose the ACLI proposal (2017-06-L) for a 90-day public comment period ending July 14.

14. Adopted the April 8 report of the Property and Casualty Risk-Based Capital (E) Working Group, which included the following action: a. Adopted its 2016 Fall National Meeting minutes. b. Adopted its Dec. 22, 2016, minutes, which included the following action:

1. Adopted the 2016 and 2017 annual financial statement guidance for the R3 charge on Annual Statement, Schedule F, Part 3 Aggregate Lines.

c. Adopted the report of the Catastrophe Risk (E) Subgroup, which included the following action: 1. Adopted its Feb. 1, 2017, and 2016 Fall National Meeting minutes. 2. Adopted agenda item 2016-07-CR (Rcat Implementation). 3. Discussed the possibility of including other catastrophe perils in the P/C risk-based capital (RBC) formula.

d. Exposed agenda item 2016-16-P (Underwriting Risk Line 4 Factors) for a 30-day public comment period ending May 8. The factors are based on the scenario #1 (10% capped) underwriting factors proposed by the Academy.

e. Exposed agenda item 2017-05-P (Underwriting Risk Line 1 Factors) for a 30-day public comment period ending May 8. The proposed change would provide routine annual update of the industry underwriting premium and reserve factors in the RBC formula.

f. Discussed the 2015 overall impact analysis. This high-level analysis included: a) the changes of all “R” components; and b) 3% operational risk charge. Also, companies with negative total adjusted capital or extraordinary large catastrophe risk charge were excluded in this analysis.

g. Received an update from the Operational Risk (E) Subgroup, which included the following action: 1. Discussed the issue related to the current growth risk methodology. 2. Exposed, for a 45-day public comment period ending May 4, a proposal of implementing an “add-on”

methodology for basic operational risk in 2017 reporting. h. Discussed making changes to the bond and preferred stock factors. This revision is to be implemented in

2018 reporting and be consistent with the revised life structure for the 20 categories for bonds. Examination Oversight (E) Task Force April 9, 2017 1. Adopted its 2016 Fall National Meeting minutes. 2. Adopted the report of the Financial Analysis Research and Development (E) Working Group, which met March 14 in

regulator-to-regulator session, pursuant to paragraph 6 (consultation with NAIC staff members) of the NAIC Policy Statement on Open Meetings, to discuss a confidential proposed regulatory document-sharing tool.

3. Adopted the report of the Financial Examiners Coordination (E) Working Group, which met Feb. 22, 2017, and Dec. 12, 2016, in regulator-to-regulator session, pursuant to paragraph 3 (specific companies, entities, or individuals) of the NAIC Policy Statement on Open Meetings, to discuss the coordination of activities of specific insurance holding company groups.


4. Adopted the report of the Financial Analysis Handbook (E) Working Group. The Working Group met March 6 and Jan. 23 and took the following action: a. Adopted a revised risk framework and risk repositories for the 2017 Financial Analysis Handbook. b. Adopted a referral to Financial Regulation Standards and Accreditation (F) Committee to incorporate the new risk-

focused analysis process into the review team guidelines. c. Began a risk-focused analysis pilot project to identify potential updates to guidance and provide insight for future

training. d. Received referrals from the ORSA Implementation (E) Subgroup and the Reinsurance (E) Task Force to update

guidance in the Financial Analysis Handbook. e. Provided an update on planned training for states related to the change to risk-focused analysis.

4. Adopted the report of the Financial Examiners Handbook (E) Technical Group. The Technical Group met March 22 and took the following action: a. Adopted revisions to the Financial Examiners Handbook to update the “credit risk” and “operational risk” branded

risk classification definitions. b. Received a referral from the ORSA Implementation (E) Subgroup and exposed revisions that reference the

Subgroup’s “ORSA Information Sharing Best Practices” document in the Financial Examiners Handbook. c. Provided updates on the ongoing projects including PBR and repository maintenance.

Receivership and Insolvency (E) Task Force April 9, 2017 1. Adopted its 2016 Fall National Meeting Minutes. 2. Adopted the April 9 report of the Receivership Financial Analysis (E) Working Group, which included the following

action: a. Reported that the Working Group met Feb. 13 in regulator-to-regulator session pursuant to paragraph 3 (specific

companies, entities or individuals) of the NAIC Policy Statement on Open Meetings. b. Discussed the status of individual receiverships and related issues, including finalization of the confidentiality

agreements with the National Organization of Life and Health Insurance Guaranty Associations (NOLHGA) and the National Conference of Insurance Guaranty Funds (NCIGF) related to participation in Working Group meetings.

3. Adopted the April 8 report of the Receivership Model Law (E) Working Group, which included the following action: a. Adopted its March 30 minutes, which included hearing a presentation from the NOLHGA on LTC insurance. b. Exposed a referral to the Financial Analysis Handbook (E) Working Group and the Financial Examiners Handbook

(E) Technical Group requesting the Financial Analysis Handbook and the Financial Condition Examiners Handbook include instructions for analysts and examiners to ensure that management, service and cost-sharing agreements under review include the language in accordance with state law that addresses when an insurer is placed into receivership similar to Section 19 of Model #450 for a 30-day public comment period ending May 10.

c. Exposed proposed recommendations for the states to review and consider improvements in their states’ receivership laws relating to receivership stays, injunctions and reciprocity provisions for a 30-day public comment period ending May 10.

d. Discussed assessment and coverage issues for LTC insurance identified in comments received relating to receivership practices and/or possible revisions to the Life and Health Insurance Guaranty Association Model Act (#520). The Working Group will continue discussions on future conference calls.

e. Reported that the Working Group met Feb. 28 in regulator-to-regulator session pursuant to paragraph 6 (consultations with NAIC staff members related to NAIC technical guidance) of the NAIC Policy Statement on Open Meetings.

4. Discussed receivership recommendations in the 2016 Workers’ Compensation Large Deductible Study. The Task Force requested states volunteer for a new working group to consider these recommendations. Adoption of charges and formation of the group will be considered at a future meeting.

5. Heard an international resolution update from Texas and New Jersey that highlighted activities of the IAIS and the Financial Stability Board (FSB). ICP 12, Winding-up and Exit from the Market, has been released for public consultation. State insurance regulators and interested parties are encouraged to review and provide comments on ICP 12. The FSB has begun the process of revising the Key Attributes Assessment Methodology for the Insurance Sector.


Reinsurance (E) Task Force April 9, 2017 1. Adopted its 2016 Fall National Meeting minutes. 2. Heard a status report on the “Bilateral Agreement Between the EU and the U.S. on Prudential Measures Regarding

Insurance and Reinsurance” (covered agreement). The covered agreement would eliminate reinsurance collateral requirements for EU reinsurers that maintain a minimum capital and surplus of €226 million and a solvency ratio of 100% of the solvency capital requirement (SCR) under Solvency II.

3. Adopted the report of the Qualified Jurisdiction (E) Working Group, including its Dec. 1, 2016, minutes. The Working Group took the following action: a. Discussed EU member state implementation of Solvency II and the potential impact on qualified jurisdiction status.

4. Adopted the report of the Reinsurance Investment Security (E) Subgroup. The Subgroup is in the process of planning its initial meetings. The goal of the Subgroup is to discuss and consider the need to clarify the concept of investment security as used in either the Credit for Reinsurance Model Law (#785) or the Credit for Reinsurance Model Regulation (#786).

5. Adopted the report of the Reinsurance Financial Analysis (E) Working Group. The Working Group met April 9 in regulator-to-regulator session, pursuant to paragraph 3 (specific companies, entities or individuals) of the NAIC Policy Statement on Open Meetings, to discuss actions taken with respect to the passporting of certified reinsurers by the states.

6. Discussed the Reinsurance Financial Analysis (E) Working Group’s referral with respect to reinsurance collateral ratings, and exposed the revised Uniform Application Checklist for Certified Reinsurers, which would add a protocol for considering a group rating, for a 30-day public comment period ending May 9.

7. Discussed a proposed accreditation standard for the Term and Universal Life Insurance Reserve Financing Model Regulation (#787), which was adopted by the NAIC membership at the 2016 Fall National Meeting. Model #787 establishes uniform, national standards governing reserve financing arrangements pertaining to term life and universal life insurance policies with secondary guarantees, and helps ensure that funds consisting of primary security and other security are held in the forms and amounts required.

8. Received a status report on the states’ implementation of the 2011 revisions to Model #785 and Model #786, and new Model #787. In 2016, the NAIC membership adopted changes to the current optional accreditation standard for certified reinsurers to make it a mandatory accreditation standard, with an effective date of Jan. 1, 2019.

Risk Retention Group (E) Task Force The Risk Retention Group (E) Task Force did not meet at the Spring National Meeting. Valuation of Securities (E) Task Force April 9, 2017 1. Adopted its 2016 Fall National Meeting minutes. 2. Adopted its Feb. 22 minutes, which included the following action:

a. Exposed, for a 45-day public comment period ending April 8, a P&P Manual amendment to: 1) modify administrative procedures for the filing exemption process; 2) add a verification procedure for private letter rated securities; and 3) add a data quality assessment procedure to the SVO compilation function.

b. Adopted a P&P Manual amendment to delete valuation instructions for Subsidiary, Controlled and Affiliated investments.

c. Adopted a P&P Manual amendment to identify the current nationally recognized statistical rating organization (NRSRO) status of credit rating providers (CRPs) on the NAIC CRP List.

d. Adopted a P&P Manual amendment to replace information about the Integrated Securities Information System (ISIS) platform with information on the new VISION platform; deferred consideration of adoption of a P&P Manual amendment to delete outdated instructions for verification of sources of credit ratings and market valuations until the Spring National Meeting; and exposed, for a 60-day public comment period ending April 23, a P&P Manual amendment to remove the 5* (Five Star) certification process.

3. Discussed an amendment to the P&P Manual to: a) provide a verification procedure for securities subject to private letter ratings; b) transfer responsibility for the administration of the filing exempt rule and process from insurance companies to the SVO: and c) provide for the creation of a data quality assessment process for the SVO’s compilation (of the List of Investment Securities) function. The Task Force will work with the SVO to create a list of issues submitted by interested parties which would form the basis of discussions by the members of the Task Force and these discussions would be used to identify changes to the SVO proposed amendment, if any.

4. Deferred discussion of an amendment to the P&P Manual to delete two additional instructions superseded by other processes. The Task Force agreed to consider the issues presented as part of the P&P Manual amendment related to the item above.


5. Discussed a proposed amendment to the P&P Manual that would delete two references to the 5* (Five Star) certification procedure embedded in analytical instructions in Part Three, Section 1 (a) (ii) (B) of the P&P Manual. The Task Force received and exposed the proposed amendment for a 60-day public comment period ending June 8. The SVO reported that it will continue to review other uses of the 5* mechanism and make additional recommendations as necessary.

6. Discussed SVO-proposed editorial changes to the instructions for the List of Qualified U.S. Financial Institutions adopted in June 2016. The list identifies financial institutions that issue letters of credit that can be used as collateral in reinsurance arrangements. The editorial changes finalize certain administrative procedures that had not been completed when the text was adopted. The SVO-proposed amendment was received and released for a 30-day public comment period.

7. Heard an NAIC Investment Analysis Office (IAO) report on a proposal of the Investment Risk-Based-Capital (E) Working Group referred to the Task Force. The IAO interpreted that the “RBC factor categories” proposed by the Working Group as a new credit quality delineator linked to NRSRO issued credit ratings. The IAO said that it could produce the required 20 delineations of credit assessment for the Working Group that would maintain the existing relationship between NAIC designations and RBC factors. The IAO proposed creating a new field named “NAIC Designation Category” that would be a more granular subset of NAIC designations. The IAO would use NAIC designation categories to create the granularity required by the Working Groups while maintaining the internal consistency to NAIC designations. The Working Group could then use the NAIC designation category to assign RBC factors, and the NAIC designation 1 through designation 6 would continue to be used in statutory accounting, reporting, state investment laws and other current uses as they are today. The Task Force received the IAO memorandum and exposed it for a 30-day public comment period ending May 9.

8. Heard a report from the NAIC Structured Securities Group (SSG) regarding the use of modified filing exempt (MFE) reporting. The SSG reported that 18.6% of structured securities are reported with an “AM” which is meant to signify MFE usage. The MFE usage resulted in a 2:1 upgrade to downgrade ratio versus rating agencies. Additionally, the SSG reported that it could not substantiate ratings for $30.7 billion structured securities via the rating agency data feeds even though they were reported as having a rating.

9. Heard a report from the SSG regarding proposed “through-the-cycle” macroeconomic scenarios. The SSG presented a technical report on model development and the results of the time-series simulation. SSG staff requested that interested parties respond with similarly technical comments. The Task Force received the SSG report and exposed it for a 60-day public comment period ending June 8. The Task Force also indicated that industry representatives should submit technical comment to SSG.

10. Heard a summary of the SSG’s report regarding changes in BlackRock’s commercial mortgage-backed securities (CMBS) credit model. The Task Force mentioned that the purpose of the report was to alert the industry to the potential changes to the RBC of insurer-owned CMBS.

11. Heard a report from NAIC Financial Regulatory Services (FRS) staff on the status of projects of the Statutory Accounting Principles (E) Working Group related to an ongoing revision of investment-related SSAPs.

12. Heard and discussed an SVO report that it lacked a methodology to reflect the special risks discussed in SSAP No. 25— Affiliates and Other Related Parties as part of its credit quality assessment for debt and preferred transactions between related parties. The Task Force agreed that the SVO should continue to assign NAIC designations to such transactions, assuming it could do so using its methodologies, pending the development of the requested guidance from the Task Force. The Task Force directed the SVO to contact state insurance departments when presented with unusual transactions for guidance on regulatory concerns that might exist as to the related entities and to ensure such state insurance departments are aware of the transaction. The Task Force received the SVO memorandum for a 30-day public comment period ending May 9 and directed that the memorandum be shared with the FRS Division and the Statutory Accounting Principles (E) Working Group for assistance in identifying regulatory criteria to be used in the SVO analytical methodology.

13. Deferred hearing two reports on fund investments to a future meeting. FINANCIAL REGULATION STANDARDS AND ACCREDITATION (F) COMMITTEE April 8, 2017 The Financial Regulation Standards and Accreditation (F) Committee met April 7, 2017. The meeting was held in regulator-to-regulator session pursuant to paragraph 7 (consideration of individual state insurance department’s compliance with NAIC financial regulation standards) of the NAIC Policy Statement on Open Meetings. During this meeting, the Committee discussed state-specific accreditation issues and voted to award continued accreditation to the insurance departments of Iowa, Nevada and Puerto Rico. The Committee also met April 8 and took the following action: 1. Adopted its 2016 Fall National Meeting minutes. 2. Adopted immediately by reference revisions made during 2016 to NAIC publications that are required for accreditation

purposes (e.g., the Accounting Practices and Procedures Manual) that were deemed insignificant.


3. Discussed the 2016 revisions to Model #520, noting that the Part A: Laws and Regulations Accreditation Standards only require a regulatory framework and not specific elements within Model #520. Therefore, the 2016 revisions are considered acceptable but not required by an insurance department to maintain compliance with the accreditation standards.

4. Discussed the Corporate Governance Annual Disclosure Model Act (#305) and the Corporate Governance Annual Disclosure Model Regulation (#306) as possible additions to the accreditation standards and considered the comment letters received. The Committee plans to vote on this item at the 2017 Summer National Meeting.

5. Discussed the 2014 revisions to the Annual Financial Reporting Model Regulation (#205) as a possible addition to the accreditation standards and considered the comment letters received. The Committee plans to vote on this item at the 2017 Summer National Meeting.

6. Discussed the 2014 revisions to Model #440 as a possible addition to the accreditation standards and considered the comment letters received. The Committee plans to vote on this item, including determining which jurisdictions should be required to comply with Model #440, at the 2017 Summer National Meeting.

7. Adopted the 2009 revisions to Model #820 as an accreditation requirement, effective Jan. 1, 2020. 8. Exposed the recommendation from the Reinsurance (E) Task Force to adopt Model #787 and the 2016 revisions to

Model #785 as accreditation requirements for a 30-day public comment period and adopted a recommendation to waive the normal timeline for adoption of these models as an accreditation standard. Model #787 and revised Model #785 would replace Actuarial Guideline XLVIII—Actuarial Opinion and Memorandum Requirements for the Reinsurance of Policies Required to be Valued under Sections 6 and 7 of the NAIC Valuation of Life Insurance Policies Model Regulation (AG 48) and establish requirements regarding the reinsurance of XXX/AXXX policies.

INTERNATIONAL INSURANCE RELATIONS (G) COMMITTEE April 8, 2017 1. Adopted its March 30 minutes, which included adoption of its revised charges. 2. Adopted the report of the ComFrame Development and Analysis (G) Working Group. The Working Group met April 4,

March 13 and Feb. 23 in regulator-to-regulator session, pursuant to paragraph 8 (consideration of strategic planning issues) of the NAIC Policy Statement on Open Meetings, to address the current status of the IAIS development of its global insurance capital standard (ICS), as well as the consultation process on revised Common Framework for the Supervision of Internationally Active Insurance Groups (ComFrame) material.

3. Adopted the report of the International Regulatory Cooperation (G) Working Group, which included an update on the NAIC International Fellows Program, various NAIC technical assistance programs, and recent bilateral meetings and dialogues.

4. Heard an update on the Organisation for Economic Co-operation and Development (OECD), including plans for and issues to be discussed at the June meeting of the Insurance and Private Pensions Committee (IPPC) in Paris.

5. Heard an update on regional supervisory cooperation activities. For the Asian region, activities included the seventh insurance regulatory dialogue between the NAIC and the Financial Services Agency (FSA) of Japan in Tokyo and participation in the Asian Forum of Insurance Regulators in Singapore. For the Latin American region, the NAIC will participate in the annual conference of the Association of Latin American Insurance Supervisors (ASSAL) in Santiago, Chile, as well as hold a bilateral meeting with the ASSAL’s Executive Committee. For Europe, a meeting with the European Insurance and Occupational Pensions Authority (EIOPA) will be held in May in Washington, DC, on the sidelines of the NAIC International Forum. An update on the covered agreement between the U.S. and the EU also was provided.

6. Heard an update on work at the IAIS. a. With regard to standard-setting, Commissioner Katharine L. Wade (CT) noted that a number of revised ICPs and the

draft ComFrame material were released for public consultation in early March with a comment deadline of June 1. The NAIC has begun its internal process to review and draft initial comments on the consultation material. She also provided an update on the IAIS ICS and its plans for enhanced field testing of ICS version 1.0.

b. With regard to financial stability, Director Peter L. Hartt (NJ) said that in March, the IAIS began the process of its fifth assessment of globally systemically important insurers (G-SIIs) with responses due back from the relevant firms by the first week of May. He noted that the IAIS has formed a new group, the Systemic Risk Assessment Task Force, with a mandate to develop a holistic framework on systemic risk assessment and measurement, including looking into the development of an activities-based approach to systemic risk assessment.

c. With regard to the implementation of standards, Commissioner Ted Nickel (WI) offered updates on the various workstreams of the IAIS Implementation Committee, including a review of the coordinated implementation framework and work on proposals on how to enhance the IAIS implementation assessment program. He also provided an updated on the IAIS Multilateral Memorandum of Understanding (MMoU) and areas of focus in 2017.

7. Heard a presentation from MetLife and Allianz on an activities-based approach to systemic risk assessment.


NAIC/CONSUMER LIAISON COMMITTEE April 10, 2017 1. Adopted its 2016 Fall National Meeting minutes. 2. Heard a presentation from CEJ on the NAIC “Principles for National Flood Insurance Program (NFIP) Reauthorization”

document. The CEJ presentation noted areas of the NFIP where the NAIC principles could be applied during the reauthorization process and encouraged the states to press for state-based regulation over the NFIP, including the addition of private flood insurance because it is important to consumers, insurers and state insurance regulators.

3. Heard a presentation from California Health Advocates, the Center for Insurance Research and consumer advocate Sonja Larkin-Thorne on guaranty funds and consumer protection as it relates to recent LTC insurance company insolvencies. This is important, as it will help state insurance regulators and insurers assist consumers with understanding their available options when a company insolvency occurs, as well as how each option would affect consumers’ lives on a daily basis.

4. Heard an update from the University of Connecticut, School of Law on pre-dispute arbitration clauses. This is useful to consumers and state insurance regulators to the extent that removing such clauses from insurance policies would give consumers more freedom to negotiate fair benefit settlements and give state insurance regulators more opportunities to help consumers in claims situations.

5. Heard a presentation from Out2Enroll, Families USA and Virginia Organizing on the need for continued consumer protections and stability in state insurance markets. This is important to consumers, insurers and state insurance regulators because it serves to enhance protections for consumers while changes may be occurring in the marketplace.

6. Heard a presentation by the National Alliance of State and Territorial AIDS Directors, the Disability Rights Education and Defense Fund, the National Health Law Program, the National Center for Transgender Equality, Dialysis Patient Citizens and the American Kidney Fund on nondiscrimination in private health insurance. This is important to consumers and state insurance regulators in that it clarifies nondiscrimination issues in private health insurance.

NAIC/AMERICAN INDIAN AND ALASKA NATIVE LIAISON COMMITTEE April 9, 2017 1. Adopted its 2016 Summer National Meeting minutes. The Liaison Committee did not meet at the 2016 Fall National

Meeting. 2. Heard a presentation by the Alaska Native Tribal Health Consortium (ANTHC) on Alaska innovations regarding tribal

health care insurance issues. 3. Discussed plans for its May 2 meeting with the National Congress of American Indians (NCAI) leadership in

Washington, DC. 4. Heard a status report on the NCAI Annual Convention and Marketplace in Phoenix, AZ, Oct. 9–14, 2016. This is an

underserved population of consumers that needs insurance education from consumers, industry and state insurance regulators as part of their overall financial education.

NAIC/INDUSTRY LIAISON COMMITTEE April 10, 2017 1. Adopted its 2016 Fall National Meeting minutes. 2. Discussed technological innovation and regulation. Presenters from the ACLI, the AIA and the PCI said technological

innovation is fundamentally changing the insurance industry, noting that new entrants to the insurance market will continue to disrupt the traditional value chains associated with insurance. They said regulatory “sandbox” solutions will provide the means to test new and innovative products, and state insurance regulators should embrace this solution for market participants.

3. Discussed data collection and management. Presenters from the ACLI and the PCI said the increasing demand for data is leading to a large increase in data calls. They said data calls should be limited to subjects within the state insurance regulators’ statutory authority and its core missions of balancing consumer protection with effective and efficient regulation.

NAIC/STATE GOVERNMENT LIAISON COMMITTEE The NAIC/State Government Liaison Committee did not meet at the Spring National Meeting. W:\national meetings\2017\Spring\Other\Synopsis\SYN-ZS-17-01.docx

The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization created and governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally. NAIC members, together with the central resources of the NAIC, form the national system of state-based insurance regulation in the U.S.

For more information, visit www.naic.org.