Group Solvency Issues (EX) Working Group
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Executive (EX) Committee Task Forces and Working Groups Summary Report
Winter 2009 Meeting Summaries Index

The Group Solvency Issues (EX) Working Group met Dec. 4, 2009. During this meeting, the Working Group,

• Discussed in detail draft revisions to the Insurance Holding Company System Model Act (#440), Insurance Holding Company System Model Regulation (#450) and Holding Company Best Practices report. The Working Group also received and discussed comments from interested regulators and interested parties on the draft revisions. The Working Group directed certain members and NAIC staff to edit some of the proposed revisions, research some specific areas and keep the documents exposed through Jan. 29, 2010.

• Discussed the concept and perspectives on group-wide supervision with members, interested regulators and interested parties. Representatives from Australian Prudential Regulation Authority and Financial Services Authority also provided high-level overviews regarding their jurisdictions perspectives on group-wide supervision, including group capital assessment and requirements.

• Discussed a draft memorandum to the Solvency Modernization Initiatives (EX) Task Force regarding possible enhancements to the already strong U.S. group supervision. The memorandum recommends a “windows and walls” approach for the regulation of U.S.-based insurers operating within corporate groups. The memorandum recommends enhancements to group supervision in the following areas: communication between regulators; supervisory colleges; access to and collection of information; enforcement measures; group capital assessment; and accreditation. If these recommendations are incorporated into the existing U.S. group solvency supervision structure, the Working Group believes such efforts will advance the strong U.S. financial regulatory framework for insurers operating within groups into coordinated robust oversight by all regulators with oversight responsibilities. The Working Group also believes such efforts will enhance understanding of the potential implication of group financial and reputational risks on an insurer within the group. The Working Group agreed to expose the memorandum for public comment through Jan. 29, 2010.

• Discussed the International Association of Insurance Supervisors (IAIS) draft Guidance Paper on Treatment of Non-Regulated Entities in Group-wide Supervision. The Working Group agreed to collect comments from regulators and interested parties through Jan. 15, 2009.

• Received a report from the Supervisory College and Methods of Cross-Boarder Communication (EX) Subgroup. Highlights included which:

  • Reviewed and commented on a memorandum prepared by the Subgroup regarding the processes and procedures relative to the states’ possible application and accession to the IAIS Multilateral Memorandum of Understanding on Cooperation and Information Exchange (MMoU). The Subgroup recommended that a survey be developed to forward to the states for feedback on an initial assessment of their laws compliance with the provisions of the MMoU.

  • Discussed and commented on a supervisory college tracking document whereby the NAIC would monitor the U.S. state insurance department participation and attendance at supervisory colleges for US insurers or groups engaged in insurance activity in multiple jurisdictions. The Subgroup exposed the tracking document for a 30-day comment period. The Subgroup anticipates presenting the document for the Working Group’s approval during first quarter of 2010

• Received an update related to the NAIC’s work in the IAIS Insurance Groups and Cross-sectoral Issues Subcommittee.

• Adopted the minutes from its Nov. 12, 2009 conference call.