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NAIC Meetings Now Underway, PIA Participating

The Fall meeting of the National Association of Insurance Commissioners (NAIC) is now underway in Orlando, with sessions set to run from October 16-21. Commissioners...
October 19, 2010

The Fall meeting of the National Association of Insurance Commissioners (NAIC) is now underway in Orlando, with sessions set to run from October 16-21. Commissioners are addressing a wide range of critical issues affecting producers.

Healthcare will once again be a main focus of this meeting. Several committees and subgroups will continue to deliberate implementation of the Patient Protection and Affordable Care Act (PPACA). PIA will continue to be involved in all the discussions surrounding implementation of the new health care law. PIA National Assistant Vice President for Regulatory Affairs David Eppstein is attending the meetings.

MLR recommendations: On October 14, the Health Insurance and Managed Care Committee approved a set of recommendations for implementation of medical loss ratio rules. If adopted by the executive committee and full membership, the recommendations will be forwarded to U.S. Health and Human Services Secretary Kathleen Sebelius for consideration. In an October 13 letter to Sebelius, Cline and other NAIC leaders asked for regulatory consideration of phase-ins of MLR rules. Beginning in 2011, insurers will be required to issue refunds to those they insure if large group plans spend less than 85 percent of their premium income on actual health costs and small group or individual plans spend less than 80 percent.

Retained asset accounts: A newly formed Retained Asset Accounts Working Group will evaluate results of a recent survey of life insurers on the practice of automatically retaining insureds' death benefits in interest-bearing accounts instead of paying them out in lump sums. This is in reaction to a recent spate of highly critical news stories detailing the practice related to life insurance policies of U.S. military personnel who were killed in action. Critics say insurance companies invest the assets in these accounts and make a higher return than the rate of interest offered to the account holders. New York Attorney General Andrew Cuomo, who is conducting an investigation, says the accounts have been known to earn as much as a 4.8 percent return while paying out as little as 0.5 percent interest to the beneficiaries of deceased soldiers, with carriers pocketing the difference.

NAIC elections in doubt: Whether this week's NAIC meetings will end with the election of new officers for next year is in doubt. The NAIC's bylaws state that elections will occur at the last meeting of the year, which until this year had been in December. But this year, the NAIC moved to three meetings per year instead of four. That has led some commissioners to support a waiver postponing the elections, according to NAIC President and West Virginia Insurance Commissioner Jane L. Cline. At issue are the upcoming November general elections which in many states could determine whether the current commissioner will be in the same office come 2011. Cline said a waiver would have to be approved by the full NAIC membership, or plenary.

NIPR board meeting: The board of directors of the National Insurance Producers Registry (NIPR) met on Sunday, October 17 to discuss several items. The board members are currently discussing the service agreement between NAIC and NIPR. A team of commissioners led by Kevin McCarty (FL) is working on behalf of the NAIC, while a team of commissioners led by Linda Hall (AK) is working of behalf of NIPR. We are confident that both sides will be able to negotiate an arrangement that works for everybody. Maryellen Waggoner, Executive Director of NIPR, reported that Massachusetts is now working with NIPR to implement electronic licensing. NIPR staff is also working to further implement electronic licensing in Hawaii. PIA National is a member of the board of the NIPR and we are constantly advocating for increasing services for producers and regulators while keeping costs down. We are committed to keep working until every jurisdiction fully utilizes NIPR.

Virginia Commissioner Honored: The NAIC bestowed its President's Award for Distinguished NAIC Member Leadership to Virginia Insurance Commissioner Alfred W. Gross. Gross, who is retiring after 14 years as insurance commissioner, was presented with the award by NAIC President and West Virginia Insurance Commissioner Jane L. Cline. The award honors an NAIC member who has shown exemplary leadership; served a sustained length of service; and has significantly contributed to advancing the mission of the NAIC.

"Al has provided exceptional leadership and guidance during his tenure," said Cline. "He has been the consummate expert on critical financial issues in the regulatory community and has worked diligently on a variety of regulatory issues on a global scale. His intelligent insight, thoughtful guidance and keen understanding of complex issues were a tremendous asset to our association."