“So far the insurance industry is in much better condition than most of the rest of the financial services sector because of strong state solvency regulations,” said NAIC President and New Hampshire Insurance Commissioner Roger Sevigny. “Simply put, the industry has not made a credible case for why we need to make changes on an emergency basis, and why those changes should be limited to the specific proposals made by the industry.”
During a four-hour public hearing held Jan. 27, 2009, regulators took comments from industry representatives, consumer groups and other interested parties on the industry’s nine proposals.
Following the hearing, members of the NAIC Capital and Surplus Working Group recommended the rejection of three proposals, and the approval of variations of six other proposals impacting reserving requirements, reinsurance collateral and accounting procedures.
“While the Working Group’s proposals have merit, we believe such adjustments would be better implemented through the NAIC’s standard protocol,” said NAIC Vice President and Iowa Insurance Commissioner Susan Voss. “Any future consideration of changes to regulatory requirements will follow the NAIC’s open, transparent and deliberative process.”
As such, the proposals adopted by the Working Group will be referred to the appropriate NAIC technical groups and committees for further consideration. In the interim, current state law provides insurance regulators with the discretion necessary to supply measured relief to companies on a case-by-case basis.
“State insurance regulators use time-tested tools to protect consumers and help maintain a solvent and competitive marketplace,” Sevigny added. “Today’s vote reflects our belief that it is not appropriate to make emergency, permanent industry-wide changes for which the need has not been demonstrated.”