The spring meeting of the NAIC just concluded in Phoenix this week, and as usual our stalwart group of captive insurance sentinels were on hand to carefully monitor the activities that might impact captives. Representing Team Vermont was Commissioner Susan Donegan, Deputy Commissioner Dave Provost, Director of Captives Sandy Bigglestone, and of course, VCIA’s own Jim McIntyre.
The Principle-Based Reserving Implementation (EX) Task Force Executive (EX) Committee considered the adoption of PBR Review (EX) Working Group Report and received an update on PBR progress from the Life Actuarial (A) Task Force, as well as other written updates on the XXX/AXXX Reinsurance Framework Charges.
The Risk Retention Group (E) Task Force discussed a number of items, including revisions and the applicability of? RRGs to?of annual disclosures and reporting regulations. They instructed NAIC staff to draft a number of comment letters to the Financial Regulation Standards and Accreditation (F) Committee on the following issues:
- stating its opinion that the Corporate Governance Annual Disclosure Model Act (#305) and the Corporate Governance Annual Disclosure Model Regulation (#306) should not be required for risk retention groups (RRGs) for accreditation purposes and explaining their reasons, including the Model Risk Retention Act’s (#705) corporate governance provisions;
- stating its opinion that the 2014 revisions to the Annual Financial Reporting Model Regulation (#205) should not be required for RRGs for accreditation purposes and explaining the reasons therefore;
- stating its opinion that the 2014 revisions to the Insurance Holding Company System Regulatory Act (#440) would likely never apply to an RRG, as it would not fit the definition of an “internationally active insurance group.”
The RRG Task Force also discussed the reference to “captive” RRGs in the Review Team Guideline within the financial analysis procedure that is specific to RRGs, and decided: 1) it will be discussed further on a future conference call; and 2) that the Model Risk Retention Act (#705) should apply to both RRGs organized under a state’s captive statutes, as well as those organized under a state’s P/C statutes.
The Financial Regulation Standards and Accreditation (F) Committee, whose mission is to establish and maintain standards to promote sound insurance company financial solvency regulation through the NAIC’s accreditation program, took time to discuss the proposed Preamble that would include, in the scope of the Accreditation Program, captive insurers and special purpose vehicles that assume business written in accordance with Regulation XXX, Regulation AXXX, variable annuities and long-term care insurance. The Committee discussed comments received and instructed NAIC staff to revise the Preamble to clarify that these are the only type of captives (other than risk retention groups) to be included in the scope of the Accreditation Program. The Committee is considering holding an interim meeting prior to the Summer National Meeting to discuss this issue further.
Jim McIntyre’s full report on these committee and other issues that impact captives will be available to our members at www.vcia.com in the coming days.