• Life Insurance in the event of a tragedy.
• NAIC. FIO to promote National Coordination in the Sector. International.
• Keeping people's hard earned money safe.
• Lockheed / Athene / Private Eqity firm Apollo.
• People are nervous. 
• PE into Insurance and other industries... problems. 
• Need to understand the risks.
• NAIC / FIO Letters. FIO - Insurance/ Interconnectedness / Systemic Risk. 
• People rely on insurance companies.
• Can't ignore when risks build up. 
• Who Pays?  AIG Bailout.  Look around the corners. Stop offering insurance. 
• Industry - long history of discrimination. NYT - Article (State Farm, Claims Paying), Watters - Chattel Slavery.  NAIC-Race and Insurance.
• IAIS ICS / Aggregation Method. US regulated different.
• Michael Barr - New Job.  NAIC 

• Been a while since we've done hearing on insurance.
  • {Missing part is on CSPAN - His List - importance of the state based insurance model, international insurance issues, efforts to use the insurance industry to effect Social Policy (Climate Change), Create Guaranty Pandemic, Risk-Based Pricing.) 
• State based System, Works well - for consumers and industry,
• IAIS - ICS, imcompatible with US, insensitive to short term fluctuations, market  and historic investment types.
  • ICS would hard availability of long-duration products. 
• (Climate Change - adjust prices),  Pandemic Risk Program, TRIA, Insurance (Bad) vs Banks (Good) Payment processing, Lockdowns, well functioning insurance system is important. 
• Insurance not for activist efforts, mitigate income equality.
• Let's have Insurance companies stick to the Business of Insurance.

• PE owned insurance, Solvency Frameworks: Public Disclosure, Conservative Accounting Requirements. Regardless of the type of ownership.  Search for yield to avoid raising prices.  Reviewing Risks to Policyholders. PE and other insurers with similar features.  Alternative investments. Tools. Confident in out system no matter how they are structured.  CyberSecurity (Model Law).  Consistency of Regulations. TableTop. Climate Risk, Survey, Disclosures, Industry Risks,  Ability to pay claims. Catastrophe risk models. 
• Race and Insurance.  Market Access and Potential Barriers. 
• Insurance Careers groups.
• International - IAIS / ICS - the ICS does not work here.  Aggregation Method. Groups Capital. Covered Agreements (US / UK).
• Federal Priorities - Flood Insurance,
• Scott - Bill - Provide State Regulators with a Vote on FSOC, Insurance Receiverships - Help Policyholders, 

• FIO's roles and responsibilities. Primarily State base, but has Fed duties.  FIO does  - Advises the Treasury Secretary, Developes policy on International Issues,  Represents US at IAIS, TRIA, Underserved Communities, Assist Treasury Secretary on Covered Agreements with International groups, Monitors the Insurance Sector - Identifying Issues or gaps that could contribute to a Systemic Crisis. Non-voting member of FSOC. Provides National federal perspective in this critical area. Top 5 Issues - 1) Climate (a) Report of Gaps b) Private companies c) International / Domestic - 2) PE Firms (Letter to Brown)  (a) Liqudity Risk  b) Credit Risk and Capital Adequacy  c) Off-Shore Reinsurance (Between Bermuda and US Markets d) Potential Conflicts of Interest  - 3) Cyber  4)  Representation of US with IAIS, with US . ICS / Aggregation Method.  Holistic. Will affect US.  5)  Race - Availability and Affordability.   Conclusion - Team USA

• PE -- No longer covered by ERISA, what risks. Do you have concerns?

• We are concered as well, letter, regulations - Liquidity Risk, Credit Risk, Reinsurance, Conflicts of Interest

• Failed companies, people, expectations, end run around the system to protect people, PBGC.
• To Birraine - Property Casualty - Market Failure.  

• There aren't problems. Non-profits - could be harmed. Admitted Carriers. Residual Market for Property insurance. Not an issues we see in maryland. Other regulators are looking at it. 

• your assessment differs from ours. Liability retention act.
  • To Seitz: are you concerned?

• We are looking at it.

• we have been working with NAIC, Can we work together.

• yes

Pension Risk Transfer, ERISA, Guaranty Funds

• Toomey: Pension Risk Transfer. Defined Benefit Obligation to Retirees.  Purchase an Annuity. PBGC no longer applies.
  • However, they are insurance companies. Insurance Guaranty funds as a Backstop
  • Birraine - yes.  /// ERISA doesn't apply.
• Toomey: But ERISA does cover the transfer.
  • Birraine: yes. /// Life Insurance Companies have extensive experience in managing Long term liabilities.  That's what they do.
• Toomey: Likely to be very well suited to the task.
  • Birraine:  I would agree.  Rigourous oversight. Covered by State Guaranty Funds, which have themselves noted that regulators hold Life insurance companies to much strictor standards than Pension Regulations.
• Toomey: That strict regulation doesn't go away if it's owned by a PE Firm.
  • Birraine: No, Stricter Regulation

• Toomey to Seitz: PE Memorandum at IAIS.
  • Are you involved in the IAIS to make recommendations?
  • You didn't answer my question.
  • Are you involved? 
  • You are evading my question, I don't know why.

• ICS / AM - Bias towards to the ICS.
  • Why would a Euro-Centric Capital standards not be appropriate? 
  • I assume you believe that.

• ICS should not seek to contradict US.

• need to at the table to improve ICS, doesn't work for long-duration products. 

• US is Gold Standard. 
• To:  Commissioner Birraine, Do you think that state based system has been effective and successful? 

• Birraine: Very much so.
  • I think it was interesting, 'know as Senator Brown referred to AIG and I think that for those of us who lived through that period of time and, 'know,  the crash of the Capital Markets in 2008.. What we know is that the one set of companies that did extremely well were the insurance companies.
  • The P&C carriers that were regulated by the States. 
  • So, as AIG sought to recover it was those companies, those assets that they were able to sell in order to fund that recovery. 
  • So, the place where state regulation is in place I think we've demonstrated over time. 

• We talk about Life Insurance Companies and we talk about the safety of Life Insurance Companies.
  • A. The Insolvency of a life insurance company is almost unhead of.
    • B. And the notion that policyholders in those rare instances where there have been an insolvency are not getting paid is also unhead of. 
    • So, I think that what the state based system has proven over and over and over again is, 'know having just come through a pandemic, having just come through a very difficult environment --- <More>

• A.NOLHGA - Impairments & Insolvencies -[link]
  • Below is a partial list of companies that have been taken over by state insurance departments (“placed in receivership”) since NOLHGA’s creation in 1983.
    • The list includes impairments (those companies that have been taken over but have not gone out of business—also known as companies in rehabilitation), which appear with an asterisk next to the name, and insolvencies (those companies that have been closed or “liquidated” by the insurance department).
• B. Examples of policyholders "not getting paid." - Semantics?
  • Mutual Benefit Life, Executive Life, MetLife

  • MR. HOWARD: The guarantee association limits for policyholders covered does provide adequate coverage. You cited a situation where there were a number of policyholders who did not have the benefit of guarantee association coverage. The policies were not covered, or a number of states did not provide coverage for that particular insolvency. MR. BARTLETT: Yes, but if you opted out of the plan, you don't have coverage under the guarantee association.. If you opt into the plan, even if you have coverage, you still subject yourself to a moratorium period, which if you have opted in, if you would cash surrender the policy in the first year, for example. Again you get only something like 55 or 60% of the cash surrender value.

    Mutual Benefit - 

• 2021 1008 - In Re: Penn Treaty Network America - No. 1 PEN 2009 - Insurance Company in Liquidation Liquidator's Brief in Support of Exceptions - 456p
  • Jessica K. Altman, Insurance Commissioner of Pennsylvania, in her capacity as Statutory Liquidator of Penn Treaty Network America Insurance Company In Liquidation and American Network Insurance Company In Liquidation
    • (p2) - While some policyholders will have their benefits covered in full, other policyholders will incur covered costs in excess of statutory limits on guaranty association coverage, leading to irreparable losses for those policyholders.

• Marijuana Insurance - Safe Banking Act 

• NAIC supports Safe Banking Act - removed federal barriers - 

• Cannabis - light bulb manufacturer - Pandemic - Business Continuation Insurance didn't cover.  

• FEMA - Bad Assumptions - Dropping Coverage - Risk Rating 2.0 - "I think FEMA has misled us."

• Cyber - 

• Cyber model law/ strengthening examiners.  Insurance data protection

• 75% Increase over the course of a year.

• NARAB - 

• PE Firms - Pension Risk Transfers - State Tools to protect policYholders. 
• Birraine: Robust set tools, solvencY of companies. Optics into companY financial, Life insurance specificallY, long-term.  

• NAIC Letter to Brown in spring.
  • Supports State Insurance Regulation. 

• PE Firms are buying everthing. Hoovered Up… people retirement MoneY. Particular model for private pensions. Apollo, JCPenneY, Lockheed….
• To Seitz:  SafetY of these americans pensions, pension transferred.
  • Would You saY that the retirees pension is just as financiallY secure now that it's managed bY a private equitY owner insurer as it was before?
  • Seitz:  

• PE Firms -
  • Fast turn around Buy / Sell.
• Experience in Kansas - Good.
  • This Administration seems to want to import European Capital Standards to the US.
• FIO has the duty to defend US internationally

• Pandemic Coverage -
  • Business Continuation - Current Market Conditions.
• To: Birraine - Markets can't absorb them.  

• Insurance Solution for Small Businesses - so the consumers know exactl what the are getting.
• Birrane:  NAIC - Supports - Certaint of benefits and values. Underwriting, pricing, claims 

• Insurance more generally - 

• Crack down on Fraud

• 1) FHLB - Review - FIO - Monitor / Participate? 2) Business Interruption Insurance - 

• Baked in. Contracts,