A request by the American Council of Life Insurers (ACLI) to
relax US life insurers’ capital and surplus requirements has been
rejected by the National Association of Insurance Commissioners
(NAIC) executive committee.
A surprise decision, it followed positive recommendation by the
NAIC’s surplus working group for six of the ACLI’s nine proposals.
The six proposals related to reserving requirements, reinsurance
collateral and accounting procedures.
Clarifying the NAIC’s decision, president and New Hampshire
insurance commissioner Roger Sevigny said that because of strong
state solvency regulations the insurance industry is in far better
condition than most of the financial services sector.
“Simply put, the industry has not made a credible case for why
we need to make changes on an emergency basis, and why those
changes should be limited to the specific proposals made by the
industry,” said Sevigny.
“While the working group’s proposals have merit, we believe such
adjustments would be better implemented through the NAIC’s standard
protocol,” said NAIC vice-president and Iowa insurance commissioner
She added that the working group’s proposals will be considered
by NAIC technical groups and committees.
“In the interim, current state law provides insurance regulators
with the discretion necessary to supply measured relief to
companies on a case-by-case basis,” said Voss.
Expressing the ACLI’s disappointment, president and CEO Frank
Keating said adoption of the proposals would have provided a
“financial cushion” and “operational flexibility” demanded by
current market conditions.
“It also would have provided more accurate information to the
public on the industry’s ability to withstand any further potential
downturn in the economy and given consumers what they need to make
informed decisions about their financial futures,” added
Strong approval of the NAIC’s decision came from non-profit
association the Center for Economic Justice (CEJ).
“State regulators today showed they can be independent of the
industry they regulate,” said CEJ executive director Birny