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NAIC 2019 Spring National Meeting

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The National Association of Insurance Commissioners held its Spring 2019 National Meeting in Orlando. This newsletter contains information on activities that occurred in some of the committees, task forces and working groups that met there and includes subsequent conference calls through April 24.

Highlights include

  • The NAIC announced that long-term care insurance issues are its number one priority in 2019 and formed the Long-Term Care (EX) Task Force to focus on market stability. 
  • The Statutory Accounting Principles Working Group adopted new guidance on structured notes and cloud computing assets. The working group also exposed for comment proposed guidance on leases, affiliated transactions, deferred income tax assets, limitations on goodwill, and rejection of ASU 2018-12 related to long-duration life insurance contracts.
  • The Blanks Working Group adopted revised AVR factors for year-end 2019 reporting to reflect the Federal tax rate changes implemented in 2018 and exposed for comment extensive revisions to Schedule DB for new guidance related to derivatives used to hedge variable annuity guarantees.
  • The Life RBC Working Group finalized its Interpretation of 2018 Life Risk-Based Capital Results in Light of the 2017 Tax Cuts and Jobs Act document. The P/C RBC Working Group adopted revised underwriting risk “line 4” factors for 2019 RBC filings. The Investment RBC Working Group has not met publicly since November, as the regulators are deliberating next steps on the life RBC bond factor project.
  • The VOS Task Force adopted guidance for its P&P Manual related to the filing exempt process for credit tenant loans.
  • The Group Capital Calculation Working Group worked to finalize its field testing process and Excel template, with the project kick-off in May. 
  • The Reinsurance Task Force has proposed additional revisions to the credit for reinsurance models to reflect adoption of the covered agreement as a result of comments received in late 2018. The task force anticipates final adoption this summer. 
  • The Life Actuarial Task Force adopted many Valuation Manual amendments, including requirements for the Deterministic Reserve scenario for Indexed Universal Life. 
  • The Variable Annuity Capital and Reserve Subgroup met nearly weekly this winter and spring to draft edits to VM-01, VM-21, and AG 43 to adopt the recommendations of the VA Framework ahead of the January 1, 2020 implementation date. 
  • The newly formed Restructuring Mechanisms Working Group began its work on addressing the perceived need for restructuring statutes; a draft white paper is expected later this year. 
  • The Casualty Actuarial and Statistical Task Force continued work on the Appointed Actuary project with discussions related to attestation, experience and continued competence. The NAIC hopes to adopt changes to the Statement of Actuarial Opinion instructions in time to implement for 2019 opinions.

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Jean Connolly

Managing Director, National Professional Services Group, PwC US

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