Market Regulation and Consumer Affairs (D) Committee

Market Analysis Procedures (D) Working Group

The NAIC began the Market Conduct Annual Statement (MCAS) in 2002 with the goal of collecting uniform market conduct related data. The MCAS provides market regulators with information not otherwise available for their market analysis initiatives. It promotes uniform analysis by applying consistent measurements and comparisons between companies.

MCAS has always been a collaboration of regulators, industry and consumers who recognize the benefits provided by MCAS in monitoring, benchmarking, analyzing, and regulating the market conduct of insurance companies. This teamwork has built MCAS from eight states collecting Life and Annuity information to nearly all states collecting Property, Casualty, Life and Annuity data. The following document, The Path to MCAS, describes the current work being done to streamline and centralize the MCAS process through the development of a web based data collection and storage application.

The Path to MCAS

Database Information
Unlike financial statements, the Life/Annuity and Property/Casualty Market Conduct Annual Statements are not actual forms, but Microsoft Access databases. The MCAS databases are compatible with Microsoft Access 2003 and 2007 with an operating system of Microsoft XP Service Pack 3 and up. An Access Runtime version of each database is available for companies that do not have Microsoft Access. A company may obtain the Runtime version by sending their U.S. Postal mailing address to the NAIC Staff Support at mcas@naic.org. Links to the MCAS databases are located in the Property & Casualty MCAS and Life & Annuity MCAS sections located on the left side of this page.

Key MCAS Dates

• April 30, 2010 – P&C MCAS submissions due to states
• June 30, 2010 – L&A MCAS submissions due to states
• October 1, 2010 – P&C report cards mailed/emailed
• November 1, 2010 – L&A report cards mailed/emailed
• November 15, 2010 – NAIC emails data calls to Market Conduct Contacts

MCAS Call Letters
Participating states request MCAS information by a call letter sent to each company. Sent annually in November, the addressee of the call letter is the Market Conduct Contact designated on the Jurat Page of the company’s Financial Annual Statement for the prior year.

Market Conduct Contact (formerly: Insurance Company Contact Form)
Every company required to participate in the MCAS project must provide a contact person responsible for the overall project. Companies must submit the required contact information on the Jurat Page of the company’s annual and quarterly Financial Statements.

Company Report Cards
To assist participating companies in gaining a better understanding of where they fit in the insurance marketplace, each company will receive a report card from each state where they filed the MCAS. The report card includes information about the company ratios in relation to the statewide industry ratios and enables companies to identify areas where opportunities may exist to improve performance. Company report cards are sent to the designated contact for the overall MCAS project. Participating states may provide the report card by one of several methods. The participating state may send hard-copy report cards to the designated company contacts for MCAS, e-mail report card information, or post statewide industry ratios on their website so companies can compare the posted statewide ratios to the information found in their own database.

Market Conduct Examinations
It is important to note that even if a company falls outside of the norm, it does not mean a market conduct examination will be called on the company. Alternatively, participation in the MCAS is no guarantee that a market conduct examination will not occur.

Questions
NAIC Staff can:

• provide copies of the Access Runtime version of the Market Conduct Annual Statement; and
• answer questions emailed to mcas@naic.org related to the business activities of the Market Conduct Annual Statement (D).

Requests regarding the following must be forwarded to the contact person for the appropriate state:

• extend filing deadlines;
• waive filing requirements;
• assist with data errors or warnings; or
• provide clarification regarding data definitions.