AIA Challenges the NAIC’s Effort to Collect Confidential Insurer Info at Upcoming Meeting

The American Insurance Association (AIA) will continue voicing strong opposition to efforts by the National Association of Insurance Commissioners (NAIC) to collect confidential and proprietary insurer information, during the NAIC’s national meeting May 31 to June 2 in San Francisco.  
  
"The NAIC is a non-profit, non-governmental entity. As such, it should not collect proprietary market data for which no guarantee of confidentiality can be provided. This information is extremely sensitive and if it were to be compromised, there would be needlessly harmful ramifications for both consumers and insurance companies. In the states where insurers file market conduct annual statements, there are clear statutory requirements governing their confidentiality, and regulators must take appropriate steps to ensure this information remains confidential," said Marc Racicot, AIA President.  
  
"Insurers already operate in a highly-regulated environment. The annual financial statement filed every year by insurers – which contains financial, and not proprietary market information – is a key tool for regulators, consumers and investors to monitor the financial health and solvency of an insurance company," concluded Racicot.  
  
Another NAIC project of great interest to AIA is the work on climate change. “We continue to advocate for a ‘White Paper’ that supports cooperative actions between insurers and regulators, emphasizes the need to send critical signals on risk, facilitates insurers offering new products and recognizes the need for public advocacy for building codes and land use controls. However, we are concerned about the lack of recognition that the science of climate change as it relates to insured risks is still in its infancy,” said David Snyder, AIA Vice President and Assistant General Counsel.  
  
“We still have serious concerns about proposed climate change disclosures that would potentially harm policyholders, investors and insurers, and that would not be appropriate in connection with the financial annual statement,” Snyder stated.  
  
AIA will continue to protect against another threat to insurer solvency during the meeting in San Francisco – the latest efforts by the NAIC’s Reinsurance Task Force to change to the requirement that unlicensed reinsurers post 100% collateral for reinsurance contracts they write in the U.S.  
  
“The new proposal will allow unlicensed reinsurers to assume insurance in the U.S. with either no collateral or significantly reduced collateral if the unlicensed reinsurer is ‘certified’ by a Port of Entry state. This proposal not only unnecessarily jeopardizes the solvency of a U.S. insurer by requiring substantially less collateral from an unlicensed reinsurer, but the regulator in the port of entry state is given final authority over how much collateral is adequate in another state, and that authority should always remain with the domiciliary regulator of the U.S. primary insurer” said Steven Bennett, AIA Assistant General Counsel.  
  
About AIA  
  
The American Insurance Association represents approximately 350 major insurance companies that provide all lines of property and casualty insurance and write more than $123 billion annually in premiums. The association is headquartered in Washington, D.C. and has representatives in every state.

Source: Source: AIA Press Release | Published on May 29, 2008