Valuation of Securities Task Force
Financial Condition (E) Committee

The mission of the Valuation of Securities (E) Task Force is to act as the forum for proposed changes to or interpretations of the Purposes and Procedures Manual of the NAIC Securities Valuation Office (the “P&P Manual) and to provide assistance to state regulators on issues involving investments made by the insurance industry. The P&P Manual governs how the SVO staff values securities and constitutes the task force’s instructions to the staff on credit assessment, classification and valuation matters.

2008 Charges

1. Consider and determine proposals to amend the Purposes and Procedures Manual .
2. Provide interpretations of the instructions contained in the Purposes & Procedures Manual as it shall deem necessary and appropriate.
3. Provide assistance to state regulators on issues involving investments made by the insurance industry.
4. Review existing or new investment vehicles that have been purchased or are anticipated to be purchased by insurers to consider the annual statement disclosure, credit evaluation techniques, valuation methodology or provide other pertinent regulatory guidance that should apply.
5. Monitor changes in accounting and reporting requirements resulting from continuing maintenance of the revised Accounting Practices and Procedures Manual to ensure that the Purposes & Procedures Manual continues to reflect regulatory objectives.
6. Review and monitor ongoing operations of the SVO. From time to time, the Task Force may review the Purposes & 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.
7. Develop, adopt, monitor and revise as necessary, an annual agenda for the SVO Research Unit.
8. Conclude the study begun in 2006 of the derivatives marketplace, to determine whether any changes to the current regulatory regime is appropriate, including whether the NAIC Derivatives Instruments Model Regulation No. 282 should be deleted, retained or modified.

Charges that Represent New Objectives and Goals, Representing New NAIC Programs

• Consider whether improvements should be made to NAIC processes by which risks in new 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.