2010s – NAIC – Insurance Commissioners – Snippets

2010s – NAIC – Insurance Commissioners – Snippets

• If a study is necessary, we urge the Senate to request the study from an objective body, such as the Government Accountability Office (GAO).

2010 0410 – Letter – NAIC to GOV (Senators) – re:  NAIC letter to Senators on the Restoring American Financial Stability Act of 2010 (RAFSA) – 4p

• Writing in our pages in February, former New York Insurance Superintendent Eric Dinallo said that “policyholders would have been protected” in the event of an AIG bankruptcy.
  • That seemed clear enough, but then Mr. Dinallo immediately added that an AIG bankruptcy “would have been bad for those same policyholders.”
    • 2010 0202 – WSJ – What I Learned at the AIG Meltdown: State Insurance Regulation Wasn’t the Problem, by Eric Dinallo – [link]  
• ⇒  So which was it?
  • State insurance regulators and industry analysts have since told us that Mr. Dinallo was wrong when he suggested that policyholders would have suffered.

2010 0910 – WSJ – ‘Systemic Risk’ Stonewall: Some bailout questions the Fed still hasn’t answered  —  [BonkNote]  —  [link]

⇒  [Bonk: Who authored this article?]

• (p17) – John Huff, NAIC / Missouri Insurance Commissioner
  • I agree with your conclusion that insurance is not included in the agency’s jurisdiction. [Bonk: Agency = CFPB) 
  • And to be fair to insurers, not all of those queries are complaints.
    • They are really an opportunity for us to have an education process.
  • Many times, they are more inquiries of how a product works, what did I buy?

2011 0728 and 1025 – GOV (House) – Insurance Oversight: Policy Implications for U.S. Consumers, Businesses and Jobs – Part 1 (2011 0728), Part 2 (2011 1025) – [PDF-285p, VIDEO-?] 

• (p14) – Terri Vaughan – (NAIC- CEO): So what we try to do is educate consumers about the critical importance of this issue.
  • We spend a lot of money on consumer education.
  • We created a Web site, Insure U Web site, for consumers to go to to get information so that they can make some decisions on-they have some understanding of how to look at these issues.
  • We provide some very basic financial information on companies.
  • I think it is a tough one.  —- There are not any real answers.
    • But educating consumers about the kinds of questions that they can ask, I think, is a start. 

2011 0914 – GOV (Senate-Banking/SII) – Emerging Issues in Insurance Regulation, Jack Reed (D-RI)  —  [BonkNote]

• G. Criteria for Collaboration
  • The following questions are designed to assist states with the determination of whether an issue is appropriate for collaboration.
  • Regulators are encouraged to review these questions whenever there is an issue of concern raised that involves a regulated entity that does business in many states.
• ^^If there is not a reference available from the NAIC Research Library or NAIC Market Regulation Department, your concern is not likely going to impact other states.

2011 1207 – NAIC/FIO Meeting on Market Conduct, (Documents shared with FIO to facilitate discussion are attached) – Federal Insurance Office – 83p

• The analyst should have a firm understanding of the following risk classifications:
  • Reputational-Negative publicity, whether true or not, causes a decline in the customer base, costly litigation and/or revenue reductions.  (p37)
• Procedure #17 guides the analyst through the assessment of any legal risk the insurer or group may have.
  • The analyst should ensure that a thorough understanding of the litigation and potential financial impact is documented.
  • Further, the analyst should communicate with the insurer’s management regarding the impact of reputation risk on continuing operations.
  • The analyst should understand the insurer’s plan to address the reputational risk and track the progress.  (p113)

2012 – NAIC – NAIC Financial Analysis Solvency Tools, Financial Analysis Handbook: Life/A&H/Fraternal Edition. 2012 Annual/2013 Quarterly – 398p

• “We have met the enemy and he is us!”
  • This famous line from the comic strip Pogo aptly describes the current state of governance at the National Association of Insurance Commissioners.

2013 1211 – Letter – Tom Leonardi (Connecticut Insurance Commissioner) to NAIC etc, re: Corporate Governance – 3p

• The 1980s ushered in the era of universal life policies.
• While such universal life policy features as flexible premiums, current and guaranteed cost of insurance scales, guaranteed maturity funds and guaranteed maturity premiums added a few wrinkles to the calculation process, the fundamentals of generating policy reserves remained fairly intact.
  • In contrast, today’s products have become much more complex.  (p11)

2013 01 – NAIC / CIPR Newsletter, By Reggie Mazyck, NAIC Life Actuary – 33p

• It is my recollection and understanding that AG 49 was created in part due to a problem with ‘gamesmanship’ in IUL illustrations.

—  Letter – Mike Yanacheak (IA)

2014 1113, NAIC – IULISG – IUL Illustration Subgroup

• 2014 12 – Woodall / Adam Hamm – re: FSOC MetLife Designation – Views of the Council’s Independent Member Having Insurance Expertise – 13p
  • Adam Hamm (NAIC President and State Insurance Commissioner Representative – North Dakota): Finally, I would be remiss if I did not mention that, despite the sheer volume of arguments (no matter how far-fetched) contained in the Basis, the Council fails to identify the specific set of legitimate issues of concern that has led to the company’s designation.  (p12)

• NAIC – Kevin M. Mccarty, Commissioner, Florida Office of Insurance Regulation, On Behalf of the National Association of Insurance Commissioners
  • (p22-23) – The U.S. system is complicated, and a lot different than the rest of the world. And it is very difficult for the IMF and others to really understand the complexity of the U.S. system and the different parts that are involved.

2015 0429 – GOV (House) – The Impact of International Regulatory Standards, Blaine Luetkemeyer (R-IA)  —  [BonkNote]

• IAIS Question 83:
• NAIC Response: Lapse risk is an example of an overall important category of policyholder behavior, which is an important risk in a number of products such as universal life and variable annuities.  (p11)

2015 0213 –  Letter – NAIC to IAIS – IAIS Insurance Capital Standard Public Consultation Document – Final NAIC comments or Draft? – 18p

• The vast majority of the Department of Insurance’s cases are brought in an administrative as opposed to judicial forum.
  • The Department’s administrative authority to obtain remedies for individual consumers is more limited than that of a plaintiff in a UCL lawsuit with respect to monetary and injunctive relief.
• Further, the existence of private plaintiffs’ lawsuits helps forward the course of the law more effectively than would be the case if the only adjudications were those proceedings, largely administrative, initiated by the Commissioner.

2015 – LC – Brief of the State of California and the California Insurance  Commissioner as Amicus Curiae in Support of Plaintiffs, Walker vs Life Insurance Company of the Southwest. Case: 15-55809, 12/16/2015, ID: 9795445, DktEntry: 24, p27-28

• Mr. Reyna {TX] said the policy overview should help consumers understand how cash value accumulates and can work to their advantage over time.
• Mr. Wicka [Chair – LIIIWG – WI] acknowledged that the issue is complicated because a lot depends on how the policy is funded; however, just the knowledge that the policy has cash value could be helpful information for a consumer comparing a term policy to a whole life policy.

2017-3V1, NAIC Proceeding – 2017 1116, LIIIWG – Life Insurance Illustration Issues (A) Working Group – Conference Call 

• 2017 0914, NAIC  – LIIIWG  – CC
  • Richard Wicka [Chair – WI] – said he had some concerns about Mr. Birnbaum’s revised introduction to the policy overview, where it says,
    • “If you have questions about this life insurance product, contact the state insurance department as well as your agent, broker, advisor, or contact a company representative.”
  • Richard Wicka …explained that state insurance departments do not give advice and should not be a place where consumers call with questions about how a specific policy works.
  • Ms. Winer said that she understands wanting to help consumers, but state insurance departments do not do analysis or endorse particular products. She cautioned against equating state insurance departments with insurance agents relative to the process of shopping for insurance.
  • Mr. Reyna and Mr. Struk agreed with Mr. Wicka and Ms. Winer.
  • Ms. Lerner said she agrees as well but thinks consumers should be able to contact the state insurance department if they are not getting a satisfactory explanation.
  • Mr. Birnbaum said he is trying to provide an objective source where consumers could obtain unbiased information.

• Complaints and inquiries related to life insurance and annuity products … generally concerned consumer dissatisfaction with, or confusion regarding, universal life insurance policies.  (p90)

2018 – Wisconsin OCI – Wisconsin Insurance Report – 219p