The NAIC held its Summer National Meeting in June, and there have been numerous follow-up Committee and Working Group conference calls in advance of the September 21-24, 2008 Fall National Meeting. Important outcomes and developments include:

  • Senior Designations. At the Summer Meeting, the Life Insurance and Annuities (A) Committee unveiled a new model regulation, based on the NASAA model rule, restricting the use of “senior designations” in life insurance and annuity sales. This model regulation was refined in subsequent conference calls, and we expect the NAIC will formally adopted it at the Fall Meeting.
  • Annuity Suitability and Disclosure. Under the A Committee’s auspices, the Suitability of Annuity Sales Working Group and a new Annuity Disclosure Working Group have each held a series of conference calls after the Summer Meeting. On the suitability side, the Wisconsin Insurance Department has developed draft “Annuity Supervision, Monitoring and Training Guidelines,” and these Guidelines are on the Suitability Working Group’s Fall Meeting discussion agenda. The Disclosure Working Group is considering changes to the Annuity Disclosure Model Regulation, primarily related to the point-of-sale Buyer’s Guide, and discussions are continuing.
  • Producer Licensing. In an ongoing effort to promote more uniform practice by the states, the Producer Licensing (D) Working Group continues to evaluate the findings and issues contained in the NAIC’s February 2008 Producer Licensing Assessment Report. The Working Group is assisting states to achieve more uniform licensing practices. An updated version of the NAIC State Licensing Handbook has been drafted and is expected to be adopted by the end of 2008.
  • Travel Underwriting. At the Summer Meeting, the NAIC plenary formally approved the proposed amendment to the Unfair Trade Practices Model Act prohibiting life insurance underwriting on the basis of past or future travel, subject to limited exceptions.
  • Excess Policy Loans. Prior to the Summer Meeting, the A Committee asked its Life and Health Actuarial Task Force to review the financial and actuarial implications of an emerging practice by insurers of making policy loans in excess of a policy’s cash surrender value. (For further information on this topic, see the Loan Settlement article on page 18.) LHATF briefly discussed this matter at the Summer Meeting, but it is not on LHATF’s Fall Meeting agenda, pending further A Committee guidance.