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Financial Regulation Standards and Accreditation
(F) Committee

Mission Statement

The mission of the accreditation program is to establish and maintain standards to promote sound insurance company financial solvency regulation. The accreditation program provides a process whereby solvency regulation of multi-state insurance companies can be enhanced and adequately monitored with emphasis on the following:

  1. Adequate solvency laws and regulations in each accredited state to protect consumers and guaranty funds.
  2. Effective and efficient financial analysis and examination processes in each accredited state.
  3. Appropriate organizational and personnel practices in each accredited state.
  4. Effective and efficient processes regarding the review of organization, licensing and change of control of domestic insurers in each accredited state.

The accreditation program will accomplish its mission by continually evaluating the adequacy and appropriateness of accreditation standards in accordance with the changing regulatory environment and through continued monitoring of accredited states by conducting the following accreditation reviews:

  • Pre-Accreditation Reviews to occur approximately one year prior to a state's full accreditation review. This review will entail a high-level review of the financial analysis and financial examination functions to identify areas of improvement.
  • Full Accreditation Reviews to occur once every five years subject to interim annual reviews. This review will entail a full review of laws and regulations, the financial analysis and financial examination functions, and organizational and personnel practices to assist in determining a state's compliance with the accreditation standards.
  • Interim Annual Reviews to occur annually to maintain accredited status between full accreditation reviews. This review will entail a review of any law and regulation changes, the financial analysis and financial examination functions, and organizational and personnel practices to ensure continued compliance with the accreditation standards and to identify areas of improvement.

2014 Charges

  1. Maintain and strengthen the Financial Regulation Standards and Accreditation Program.
  2. Assist states, as requested and as appropriate, in implementing laws, practices and procedures, and obtaining personnel required for compliance with the standards.
  3. Conduct a yearly review of accredited jurisdictions.
  4. Consider new model laws, new practices and procedures and amendments to existing model laws and practices and procedures required for accreditation, and determine timing and appropriateness of the addition of such new model laws, new practices and procedures, and amendments.
  5. Render advisory opinions and interpretations of model laws required for accreditation and on substantial similarity of state laws.
  6. Review existing standards for effectiveness and relevancy and make recommendations for change, if appropriate.
  7. Produce, maintain and update the “NAIC Accreditation Program Manual" of the Financial Regulations Standards and Accreditation Program” to provide guidance to state regulators regarding the official standards, policies and procedures of the program.
  8. Maintain and update the NAIC’s “Financial Regulation Standards and Accreditation Program” pamphlet.
  9. Perform enhanced pre-accreditation review services, including but not limited to, additional staff support, increased participation, enhanced report recommendations and informal feedback.

Recent Changes to Accreditation Standards

Now in Effect

Business Transacted with Producer Controlled Property/Casualty Insurers (#325) for RRGs
Part A: Laws and Regulations Standards for risk retention groups (RRGs) went into effect in 2011, and one of the Part A standards includes the Business Transacted with Producer Controlled Property/Casualty Insurer Act (#325). The Part A requirement is that the states have a regulatory framework similar to Model #325. It was later noted, however, that the model specifically exempts RRGs from its definition of “licensed insurer.” This issue was referred to the Property and Casualty Insurance (C) Committee, and it removed the exemption for RRGs from the definition of “licensed insurer” in Model #325. Therefore, those states with multi-domestic RRG that are controlled by a producer should have a regulatory framework similar to that included in Model #325 by Jan. 1, 2014.

2008 Revisions to the Model Regulation to Define Standards and Commissioners Authority for Companies Deemed to be in Hazardous Financial Condition (#385)
Amendments to the Model Regulation to Define Standards and Commissioners Authority for Companies Deemed to be in Hazardous Financial Condition (#385) were adopted in 2008. The model provides additional standards for consideration by the commissioner to determine whether the continued operation of any insurer might be deemed to be hazardous to its policyholders, creditors or the general public. In addition, the revisions give the commissioner additional authority to issue an order requiring companies deemed to be in a hazardous financial condition to take corrective action. The revisions to model #385 impact the first two significant elements under the “Corrective Action” standard currently required for accreditation.

Risk Based Capital (RBC) for Insurers Model Act (#312) Required for RRGs
Part A standards became effective for risk retention groups on January 1, 2011. However, the Capital and Surplus standard did not require that a state adopt the RBC Model Regulation for use with RRGs. On a December 14, 2011, conference call, the FRSAC adopted the proposed revisions to the “Capital and Surplus” Part A standard that makes RBC applicable to RRGs.

Revisions to the Review Team Guidelines for Significant Changes Included in the 2013 Financial Condition Examiners Handbook
At the 2013 Fall National Meeting, the F Committee adopted various revisions to the Review Team Guidelines related to significant changes that are included in the 2013 edition of the Examiners Handbook.

Revisions to the Review Team Guidelines for Group Holding Company Analysis
At the 2013 Fall National Meeting, the F Committee adopted various revisions to the Review Team Guidelines related to the group holding company analysis that relate to significant changes made to the Financial Analysis Handbook.

Revisions to the Review Team Guidelines for Uploading Examination Reports to FEETS
At the 2013 Fall National Meeting, the F Committee adopted revisions to the Review Team Guidelines related to the new requirement that examination reports be uploaded to the NAIC Financial Exam Electronic Tracking System.

Removal of Note 1 Surplus Reconciliation Requirement in CPA Report for RRGs Using a Basis of Accounting other than Statutory Accounting Principles
At the 2013 Fall National Meeting, the F Committee adopted a referral from the Risk Retention Group (E) Task Force that recommended removal of the requirement that RRGs using a basis of accounting other than statutory accounting principles (SAP) include a reconciliation back to SAP surplus in Note 1 of the annual audited financial report. The unaudited reconciliation will still need to be included in Note 1 o the NAIC Annual Statement Blank.

Part A: Regulatory Authority Standard
The Part A Standard regarding Regulatory Authority became effective on January 1, 2012, but there was some initial confusion during the implementation period. To resolve the issue, clarifying instructions were adopted and will be included in the Accreditation Interlineations.

Effective January 1, 2015

Risk-Based Capital for Health Organizations Model Act (#315)
At the 2010 Spring National Meeting, the Financial Condition (E) Committee adopted a recommendation to make the Risk-Based Capital for Health Organizations Model Act (#315) an accreditation standard. There have been no revisions made to Model #315 since 2009. Model #315 will be included in the Part A standards under the Capital and Surplus Requirement standard currently required for accreditation.

Effective January 1, 2016

2010 Revisions to the Insurance Holding Company System Regulatory Act (#440) and the Insurance Holding Company System Model Regulation (#450)
Revisions to the Insurance Holding Company System Regulatory Act (#440) and the Insurance Holding Company System Model Regulation (#450) were adopted by the NAIC membership in December 2010. The revisions to Model #440 and Model #450 primarily relate to supervisory colleges and the Form F (Enterprise Risk Report) filing. States should have the revisions enacted no later than Jan. 1, 2016. Please note: The Form F filing requirement in the model and adopted by the Committee does not have a premium threshold. All insurers that are in a holding company should be required to file a Form F. Attached are tracked changes versions of the models and the significant elements.

Conference Call Calendar

NAIC conference calls & interim meetings are available on the NAIC Conference Call Calendar. See NAIC's revised policy statement on open meetings.

There are no advance materials at this time.

Go to the exposure draft index.
30 Day Exposures
There are no exposure drafts at this time.
45 Day Exposures
There are no exposure drafts at this time.
One Year Exposures
ORSA Part A Accreditation
Risk Management and Own Risk Solvency Assessment Model Act (#505) – It is being recommended that this model be added as a new Part A: Laws and Regulations Accreditation Standard. Attached is the referral memo that includes suggested significant elements.
Please forward comment letters to Julie Garber. Comments must be received by December 31, 2014 for discussion at the Committee's meeting during the 2015 Spring National Meeting.
documents and resources
Accreditation Informational Pamphlet
Accredited US Jurisdictions
Multi-State Reinsurer Proposal
Comment Letters:
Related NAIC Publications

Minutes for the four most recent NAIC National Meetings are available free for meeting attendees and members. Members may access minutes via StateNet. If you do not know your User ID or password, please contact the NAIC Help Desk.

Contacts
Media queries should be directed to the NAIC Communications Division at 816-783-8909 or news@naic.org.
Julie Garber, CPA
Senior Accreditation Manager
Phone: 816.783.8130
E-mail:JGarber@naic.org
Sara Franson
Accreditation Program Manager
Phone: 816.783.8425
E-mail: SFranson@naic.org
Sherry Shull
Accreditation Program Specialist
Phone: 816.783.8128
Email: sshull@naic.org
Please see the current Committee List for a complete list of committee members.