NCOIL Holds Its 2009 Annual Meeting

Senior Vice President Bill Anderson Represents NAIFA

NCOIL held its 2009 Annual Meeting on November 18 – 22 in New Orleans, Louisiana.  Bill Anderson represented NAIFA at the meeting where the following issues of interest to NAIFA members were discussed:

Election of Officers:
The following slate of officers was elected for 2010:

• President: Rep. Robert Damron, KY
• President-Elect: Rep. George Keiser, ND
• Vice President: Sen. Carroll Leavell, NM
• Secretary: Sen. Vi Simpson, IN
• Treasurer: Rep. Charles Curtiss, TN

Financial Services and Investment Products Committee:
The Committee adopted the Credit Default Insurance Model Legislation with a purpose of regulating credit default swaps by defining them as insurance and making them subject to state insurance regulation.  The Model bill:

• Includes a definition of credit default insurance, in line with other credit default instruments such as financial guaranty, surety, residential value and credit insurance
• Mandates licensing of credit default insurers and imposes solvency standards
• Sets strict limitations on permissible credit default insurance, restricting writing of the product to purchasers with a material interest in the underlying asset.

While the Committee recognized that the federal government might in time preempt state regulation of credit default swaps, it felt that it was important for state regulators to act now to establish appropriate regulation of these products.

The Committee also adopted its charges for 2010 which include:

• Interact with Congress, the NAIC, and other interested parties on systemic risk proposals
• Explore regulation of the title, credit, and mortgage insurance industries
• Monitor credit default swap activity
• Monitor implementation of federal credit card consumer protection laws and regulations.

State-Federal Relations Committee:
The Committee heard a report on various federal insurance reform proposals including OFC, NARAB II, and Systemic Risk Regulator.

The Committee adopted a resolution sponsored by Committee Chair Rep. Greg Wren (AL), opposing H.R. 2609, the Federal Insurance Office Act of 2009.  The resolution further stated that NCOIL believes that the creation of any such insurance office will inevitably lead to federal insurance chartering.

The committee also adopted its charges for 2010 which include:

• Expand efforts to support state-based insurance regulation
• Advance state modernization initiatives related to producer licensing
• Continue support for Interstate Insurance Product Regulation Compact expansion.

Health, Long-Term Care & Health Retirement Issues Committee:
The Committee discussed at length the Proposed Principles on Healthcare Reform and adopted those Principles which include:

• NCOIL supports healthcare reform that would provide consumers with access to affordable coverage and quality care
• NCOIL believes that the states, acting as laboratories of democracy, are the appropriate venues for reform
• NCOIL supports examination of the impacts on other lines of insurance, including workers’ comp and auto
• NCOIL opposes any preemption of state regulatory authority
• NCOIL opposes any attempt to repeal the antitrust exemption under the McCarran-Ferguson Act of 1945.

The Committee also adopted a resolution sponsored by NAIFA member Rep. Ron Crimm (KY) Concerning the Role of Insurance Agents and Brokers in the Healthcare Delivery System.  NAIFA supported the adoption of this resolution by which NCOIL urges Congress to ensure that licensed health insurance agents retain the right under any newly enacted legislation to enroll individuals and employers in any private or public sector health insurance option available.  This resolution tracks directly with NAIFA policy where we have succeeded so far in including the role of the agent in both the House and Senate bills.

Life Insurance & Financial Planning Committee:
The Committee discussed and heard updates on a number of issues including:

• Principles-Based Reserving Efforts
• Life Insurer Capital & Surplus Relief Proposals
• SEC Indexed Annuity Activity
• NAIC Annuity Suitability Developments
• Life Settlements Activity

The Committee adopted its 2010 charges which include:

• Continue to examine a principles-based approach for life insurance reserves and develop a position as appropriate
• Continue to examine capital and surplus relief efforts and input as appropriate
• Examine life insurance suitability efforts
• Monitor and report on emerging state and federal life settlement activity
• Monitor and report on regulatory issues related to annuities

NAIFA will closely follow all these initiatives and comment to NCOIL as necessary.

NCOIL-NAIC Dialogue:
This session mainly concerned NCOIL’s extreme criticism of NAIC’s Proposed National Insurance Supervisory Commission which would allow states to form a compact which could set national standards for certain elements of insurance regulation.  The draft contemplates asking Congress to authorize this compact and preempt any states’ laws that have not joined the compact.  NCOIL vigorously opposes this concept and is urging NAIC to meet with NCOIL to address many issues in this concept.  The NAIC was represented at the meeting by Mary Jo Hudson, Ohio Commissioner and James Wrynn, New York Superintendent along with Andy Beal, NAIC Chief Operating Officer.  These representatives defended the draft and stated that it is a work in progress and that NCOIL and other interested parties will be consulted on an ongoing basis as the concept is further developed.

The next NCOIL meeting is scheduled for March 5-7, 2010 in Charleston, SC.

NAIFA Staff Contact: William Anderson, Senior Vice President – State Government Relations, at (703) 770-8193.