The NAIC’s Solvency Modernization Initiative (E) Task Force (the “SMI Task Force”) and its working groups, including the Corporate Governance (E) Working Group (the “CG Working Group”), the Group Solvency Issues (E) Working Group (the “GS Working Group”) and the International Solvency and Accounting Standards (E) Working Group (the “ISAS Working Group”), held meetings at the NAIC Spring 2013 National Meeting.
The CG Working Group adopted the “Proposed Responses to a Comparative Analysis of Existing U.S. Corporate Governance Requirements”. The document summarizes a comparative analysis of existing corporate governance standards and practices in place within the U.S. regulatory system against international standards, company best practices and regulatory needs. In addition, it sets forth proposed enhancements for corporate governance. In addition to adopting this document, the CG Working Group adopted two model law development requests in support of the enhancements included in the Proposed Responses. The document and the model law development requests will be presented to the SMI Task Force for consideration and approval.
The GS Working Group met at the NAIC Spring 2013 National Meeting to hear updates on initiatives of the International Association of Insurance Supervisors (“IAIS”) Groups and Cross-Sectoral Subcommittee and the IAIS Joint Forum Initiative. After considering a draft memorandum with proposed changes to the Part A accreditation standards related to the Risk Management and Own Risk and Solvency Assessment Model Act, the GS Working Group adopted the draft. The GS Working Group exposed a draft memorandum with proposed changes to the Part B accreditation standards relating to holding company analysis for a 45-day comment period and proposed changes to the Financial Analysis Handbook for a 60-day comment period.
Finally, the ISAS Working Group met and discussed documents prepared by the IAIS Solvency Subcommittee regarding the development of a scenario-based approach to group capital, documents relating to ComFrame, and status reports from the IAIS Accounting and Auditing Issues Subcommittee and on the IASB March 2013 Financial Instruments: Expected Credit Losses exposure draft (the “IASB Financial Instruments draft”) and the IASB Insurance Contracts exposure drafts (the “IASB Insurance Contracts draft”). The ISAS Working Group will hold a conference call to draft comments on the IASB Financial Instruments draft and expects that the IASB Insurance Contracts draft will be released by June 30, 2013.