Valuation of Securities (E) Task Force
Financial Condition (E) Committee

The mission of the Valuation of Securities (E) Task Force is to provide regulatory leadership and expertise on investment risk. The Task Force formulates policy recommendations and administrative instructions to regulate investments and investment risk. The Task Force also formulates NAIC policy that governs how analytical tools— for example, credit assessment, valuation and classification of insurer-owned securities—is employed and how analytical insight into investment risk is applied for regulation. The Task Force is supported by the NAIC Securities Valuation Office, which functions in accordance with instructions adopted by the Task Force and contained in the Purposes and Procedures Manual of the NAIC Securities Valuation Office (the Purposes & Procedures Manual).

Ongoing Charges:

1. Review insurers’ existing and/or anticipated investments and determine the appropriate credit assessment, valuation or other procedures that should be applied in such analysis. Coordinate the process by which statutory accounting, annual statement instructions, blanks reporting, asset and interest maintenance reserving, risk-based capital and other applicable guidance is formulated—Essential

2. As  necessary,  consider  improvements  to  the  process  by  which  risks  in  invested  assets  are  evaluated, communicated and monitored, and how the annual statement investment schedules could be made more transparent to better reflect non-credit risks, such as various structural risks embedded in new and existing securities—Essential

3. Evaluate and resolve issues raised by state insurance regulators involving investments made by the insurance industry—Essential

4. Serve as the primary NAIC contact point into the regulatory process for insurance companies, their investment advisors and other market participants

5. Consider and determine proposals to amend the Purposes & Procedures Manual—Essential

6. Provide interpretations of the instructions contained in the Purposes & Procedures Manual—Essential

7. Monitor changes in  accounting and  reporting requirements resulting from continuing maintenance of the Accounting Practices and Procedures Manual to ensure that the Purposes and Procedures Manual continues to reflect regulatory objectives—Essential

8. Review and monitor ongoing operations of the Securities Valuation Office. From time to time, the Task Force may review any instruction, procedure or methodology in the Purposes and Procedures Manual to ensure it continues to reflect regulatory objectives. In this review and monitoring function, the Task Force shall coordinate administrative issues with the Internal Administration (EX1) Subcommittee and other issues with the appropriate NAIC committee—Essential

The following Working Groups report to the Valuation of Securities Task Force:

• C-1 Factor Review Subgroup
• Invested Assets Working Group