NAIC 2019 Summer National Meeting
The National Association of Insurance Commissioners held its Summer National Meeting in New York City. 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 August 22.
Highlights include
- The Statutory Accounting Principles Working Group adopted new guidance on income taxes, leases, affiliated transactions and collateral and bank loans. The working group also exposed for comment proposed guidance on life and health reinsurance, goodwill and investments in collateralized fund obligations.
- The Blanks Working Group adopted a new Schedule DB, Part E to report derivatives hedging variable annuity guarantees and added “NAIC designation modifiers” to the investment schedules for the planned implementation of the 20 NAIC bond rating classes for RBC purposes.
- The Capital Adequacy Task Force will review the “comprehensive fund proposal” to treat all SVO-designated bond mutual funds consistently for RBC purposes, which could result in using the bond RBC factors versus the common stock factor for such funds. The Life RBC Working Group continues progress on implementing longevity risk for annuities for year-end 2020. The P/C RBC Working Group finalized its proposal for revised bond factor charges using the proposed 20 NAIC rating classes, but the Investment RBC Working Group has not met publicly since November of 2018, as the regulators are deliberating next steps on the Life RBC bond factor project.
- The VOS Task Force proposed revoking the filing exempt status for rated “principle protected notes.” The task force continues to consider new guidance for “non-traditional credit tenant loans,” but has not reached any tentative conclusions.
- The Reinsurance Task Force gave final approval to revisions to the credit for reinsurance models to reflect adoption of the EU and UK Covered Agreements.
- The Life Actuarial Task Force adopted numerous Valuation Manual amendments, including interim guidance related to the contentious YRT reinsurance reserve credit issue.
- Many NAIC groups contributed to the completion of guidance for the Valuation Manual and Life RBC to implement to the Variable Annuities Framework as of January 1, 2020, with early adoption for year-end 2019 permitted.
- The Restructuring Mechanisms Working Group heard detailed presentations on state and international activities on insurance business transfers and corporate division statutes, which will inform its white paper recommendations scheduled for the summer of 2020.
- The Casualty Actuarial and Statistical Task Force completed work on its years-long, controversial Appointed Actuary project with significantly revised annual statement instructions for the Statement of Actuarial Opinion, effective for 2019 opinions.
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