Life Insurance and Annuities (A) Committee
March 30, 2008

The Life Insurance and Annuities (A) Committee met on Sunday, March 30, 2008.

During this meeting, the Committee:

• Adopted its March 24, 2008 conference call minutes.

• Discussed its 2008 Committee Charges and priorities for 2008.

• Discussed the revised draft consumer alert and insurer and producer bulletin on the use of senior designations in the sale of annuities to seniors. The Committee set a two-week comment period on the drafts. After the comment period ends, the Committee anticipates holding a conference call to take final action on the bulletin and consumer alert.

• Discussed and adopted revisions to the NAIC Unfair Trade Practices Act to address travel underwriting. The revisions prohibit an insurer from refusing life insurance to, refusing to continue life insurance of, or limiting the amount, extent, or kind of life insurance coverage available to an individual based on past lawful travel experiences. With respect to future travel plans, the revised model prohibits the same actions by insurers unless certain actuarial requirements are met. However, the insurer may take such action if it is taken because either one of the following is true with respect to the specific travel destination: the Centers for Disease Control and Prevention has issued alerts or warnings regarding serious health-related conditions or an epidemic or pandemic alert or response; or there is an ongoing armed conflict involving the military of a sovereign nation foreign to the country of conflict. In another provision, the revised model requires insurers to make any pertinent underwriting guidelines and supporting analyses available to the commissioner upon request.

• Heard a presentation from the Wisconsin Office of the Insurance Commissioner on its activities related to suitability of annuity sales and the development of supervisory standards. The Committee decided to form a Subgroup to work on these issues. Wisconsin will be the Chair.

• Heard an update from the Iowa Insurance Department on its annuity activities.

• Received the report of the Consumer Guides Working Group. Since the 2007 Winter National Meeting, the Subgroup has met by conference call several times. Initial conference calls focused on gathering information about how annuities are currently marketed and sold and determining the function of the current Annuity Buyer’s Guide in that process. The Subgroup agreed that the guide should be easy to read, eye catching and informative. It should not be too lengthy and it should take into consideration the content of other materials given to potential purchasers of annuities. The Subgroup formed a small drafting group to write an initial draft to bring back to the Subgroup.

• Received the report of the Life and Health Actuarial Task Force report. The Task Force is continuing its work on the revisions to Standard Valuation Law and the drafting of the Valuation Manual. The Task Force has had at least 30 calls since December 2007. The primary work of the Task Force at this meeting was to consider proposed amendments to the proposed revision of the Standard Valuation Law. Some of the key issues addressed were: clarifying the valuation manual only applies prospectively except for the Actuarial Opinion Memorandum; defining terms such as appointed actuary, qualified actuary and cash flows; formatting of the proposed model law; and consistency corrections. The Task Force hopes to be able to finish its work on the Standard Valuation Law by Summer National Meeting.

• Received a referral from the Receivership Model Acts Revision Working Group of the Receivership and Insolvency (E) Task Force asking the Committee for a recommendation on how to proceed with revisions to Section 19 of the Life and Health Insurance Guaranty Association Model Act.

Action Items:

1. Adopted its March 24, 2008 conference call minutes.
2. Adopted revisions to the NAIC Unfair Trade Practices Act to address travel underwriting.
3. Formed an Annuities Issues Subgroup.
4. Received the report of the Consumer Guides Working Group
5. Received the report of the Life and Health Actuarial Task Force.
6. Received a referral from the Receivership Model Acts Revision (E) Working Group related to Section 19 of the Life and Health Insurance Guaranty Association Model Act.