To keep up to date and foster mutual good will, VCIA maintains many relationships with associations related to insurance and captives, specifically. One such prominent organization is The National Association of Insurance Commissioners (NAIC), which was founded in 1871 (!) and serves as standard-setting organization for the chief insurance regulators from all 50 states. NAIC offers informed expertise, data, and analysis for “insurance commissioners to effectively regulate the industry and protect consumers.” I attended the NAIC Annual Spring Meeting, this year in Louisville, and report back with some interesting findings.
You may ask, why did I attend the NAIC Meeting? Simply put it is important that we stay on top of the activities of this group as they directly impact the way in which captives and RRGs operate within the broader insurance markets that the group is concerned with. Now, onto my findings.
First off, this meeting is HUGE! So big that despite the fact that the Vermont DFR had a delegation there, I only saw them from a distance!
Second, there is great information provided that is well-researched over a long period of time and has quite an impact on different insurance sectors. For example, in 2021 private residential flood policies issued were up 29% in number over 2020. While the impact on this is primarily within the consumer sector, the businesses around where the consumers live are subject to the same climate-driven risks, and it serves as a reminder how interconnected insurance can be to different entities.
Third, we get early warning as to future direction for the NAIC and what this might do for captives. An example of this was seen in the Financial Regulation Standards and Accreditation (F) Committee and their work on the group capital calculation (GCC). There were a number of comment letters considered at this meeting and a revised GCC will be up for adoption at the Summer National Meeting of the NAIC, with a recommended adoption date of 1/1/2026. VCIA will keep monitoring this and share any news with members as it develops.
Finally, as with all quality conferences, I developed some personal connections that will prove valuable to VCIA and its members. I had several discussions with insurance company general counsels, NAIC staff members and others as we explored matters of mutual interest.
I was also fortunate to have Jeff Klein as my chaperone! Jeff is the VCIA’s representative on NAIC matters and reports back monthly to our Legislative Committee. We continue to be proactive in anticipating captive needs and challenges, and our ability to have the Legislative Committee and members informed, thanks to Jeff and so many other diligent folks, assures that the future directional intent for regulation is in safe hands!