Internal Administration (EX1) Subcommittee
September 29, 2007

The Internal Administration (EX1) Subcommittee met on Saturday, September 29, 2007.

During this meeting, the Subcommittee:

Adopted interim meeting minutes of June 3, 2007 and Sept. 17, 2007, regarding a secondee to the IAIS and adoption of the proposed 2008 budget, respectively. In particular, the Subcommittee adopted a proposal to provide an NAIC secondee to the IAIS for a two-year term. (Details on the proposal can be found in your budget materials, which you received during Roundtable.)

Received a report from the Audit Committee, which included a report on an actuarial review of the NAIC’s closed defined benefit plan, as well as the financial results and related investment performance of the NAIC through August. The Committee reported on 2 recommendations from the Association’s outside investment advisor regarding reallocation of certain equity holdings and authorization to apportion a specific amount of fixed income holdings to a convertible bond fund. In this regard, the Subcommittee adopted each of the Committee’s recommendations. The Committee also received a status report on a Request for Proposal (RFP) for the annual audit of the NAIC, NIPR and IIPRC’s financial statements. The Chair of the Committee, Commissioner Cline, reported on a teleconference held with NAIC staff regarding the Association’s Risk Management and Compliance Program, as well.

Received a report from the NAIC’s Executive Vice President/CEO (Cathy Weatherford) regarding various administrative, operational and management activities of the NAIC since the Summer National Meeting ( San Francisco, CA).

Received an update from the NAIC’s CFO (Jeff Johnston) on the 2008 budgeting process, noting the NAIC membership was scheduled to receive a short presentation from Commissioner Praeger during Roundtable. Mr. Johnston also noted a public hearing was scheduled for Nov. 6, 2007, and that staff is planning an outreach to industry trade and consumer representatives to cover key aspects of the budget.

Authorized the NAIC Officers to sign a corporate resolution to allow the NAIC to enter a Procurement Card Agreement with its current financial institution.

Received a status report from the NAIC’s IT Director (Denise Matthews) on the progress of the State Producer Licensing Re-engineering Project (SPLR).

Adopted non-substantive edits to its proposed charges for 2008.

Reconstituted an EX1 working group to revisit the SVO Industry Assessment structure.

Commissioner Cline, in her capacity as Chairperson of the Interstate Insurance Products Regulation Commission (IIPRC), reported on recent, current and future financial concerns of the Commission, including prospective financial needs from the NAIC to support 2008 calendar year operations. The Subcommittee communicated its continued support of the success of the Commission and expects to receive a specific request for additional funding at its winter national meeting.