Internal Administration (EX1) Subcommittee
March 29, 2008

The Internal Administration (EX1) Subcommittee met on Saturday, March 29, 2008.

During the meeting, the Subcommittee:

• Adopted the minutes of its Dec. 2, 2007 meeting.

• Received a report from the Audit Committee, which included a report on the financial results and investment performance through Dec. 31, 2007 and a brief update on financial results through Feb. 29, 2008. The Committee also received a report from the independent auditor from Mayer Hoffman McCann in Kansas City, which included an unqualified audit opinion and supplemental letters to the audit report noting no deficiencies in NAIC’s internal control structure or disagreements/issues/concerns with management.

• Received a status update on the NAIC’s Insurance Regulator Professional Designation Program, noting Oct. 1, 2007 marked the one-year anniversary of the program. The Subcommittee noted the program met or exceeded its first year goals, with 29 states and 92 individuals enrolling in the program, 15 qualifying curriculum courses and exams completed in 2007, and three designations awarded by the end of the year.

• Received a report from the SVO Revenue Considerations Working Group, noting the group will be meeting on several occasions between now and the Summer National Meeting, with a goal of making a recommendation to the Subcommittee in San Francisco. The working group is charged with a review of alternative methods of funding SVO operations, including analysis of the annual assessment mechanism implemented in 2004.

• Adopted a report proposing changes to the NAIC national meeting schedule beginning in 2010. With authorization from the Subcommittee and Executive Committee, NAIC staff has worked with those hotels contracted through December 2012 in order to negotiate alternative dates and implement a three-national meeting per year schedule. NAIC staff reported that all hotels have agreed to modify meeting dates with no contract penalties, and that consideration has been given to accommodate an Executive Committee Retreat in July and the Commissioners Conference in October of each year. The Subcommittee authorized staff to pursue the appropriate contract addendums and fully implement this national meeting schedule in 2010.

• Received a report from the NAIC’s EVP/CEO regarding various administrative, operational, and management activities of the NAIC since the Winter National Meeting in Houston, TX. Of particular note, the Association produced a Long-Term Care public service announcement that achieved over 29 million impressions in its first two months.

• Adopted a corporate resolution to add Brady Kelley as a signature authority on the NAIC banking and investment accounts.