The Financial Regulation Standards and Accreditation (F) Committee met on Saturday afternoon at the 2013 Summer Meeting of the National Association of Insurance Commissioners (NAIC) in Indianapolis, IN. All items on the agenda were passed unanimously, including the following:
- The 2010 revisions to the Insurance Holding Company System Regulatory Act (#440) and Insurance Holding Company System Model Regulation (#450) that include, among other things, Enterprise Risk Reporting (Form F), the creation and participation in supervisory colleges for insurance commissioners, modifications to the requirements for transactions within an insurance holding company system (Form D), and clarifications with regard to a commissioner’s authority to access to books and records, will become effective January 1, 2016.
- The Risk Management and Own Risk and Solvency Assessment Model Act (#505) (ORSA) will be exposed for a one-year comment period beginning on January 1, 2014. Pursuant to the recommendation of the Risk Retention Group Task Force, ORSA would apply to risk retention groups (RRG) in addition to insurance companies.
- Following the recommendation of the Risk Retention Group Task Force, the exemption for RRGs will be deleted from the Business Transacted With Producer Controlled Property/Casualty Insurer Act (#325), effective January 1, 2014. This revision is only expected to impact a small number of RRGs.
- Section 4B(10) of the Model Regulation to Define Standards and Commissioner’s Authority for Companies Deemed to be in a Hazardous Financial Condition (Model #385) has been identified as a significant element that should be required for accreditation purposes and will be exposed for a 30-day comment period. This element allows the commissioner, upon a finding of hazardous operation, to issue an order requiring the insurer to correct corporate governance practice deficiencies.