Regulatory Update: NAIC Fall 2020 National Meeting
1. NAIC Adopts the Group Capital Calculation Template and Instructions and Related Revisions to the Insurance Holding Company Act
On December 9, 2020, the NAIC adopted the Group Capital Calculation (GCC) template and instructions and corresponding amendments to the Insurance Holding Company System Regulatory Act (#440) (Model 440) developed by the NAIC’s Group Capital Calculation (E) Working Group (GCC Working Group).
2. NAIC Continues Discussion of Proposed Revisions to Statements of Statutory Accounting Principles
The Statutory Accounting Principles (E) Working Group (SAP Working Group) continued its ongoing work related to the following Statements of Statutory Accounting Principles (SSAPs): SSAP No. 25 — Affiliates and Other Related Parties; SSAP No. 71 —Policy Acquisition Costs and Commissions; and SSAP No. 43R —Loan-Backed and Structured Securities.
3. NAIC Continues Efforts to Address Innovation and Technology in the Insurance Sector
Several NAIC task forces and working groups are evaluating the intersection of technology and insurance, including in the areas of the use of predictive modeling in rate filings by property and casualty insurers and the application of antirebating laws.
4. NAIC Continues Work to Develop Guidance Related to Long-Term Care Insurance
The subgroups of the Long-Term Care Insurance (EX) Task Force continue their work to develop guidance intended to facilitate uniformity in long-term care insurance rate reviews and the evaluation of reduced benefit offers for policies that are no longer affordable due to rate increases.
5. NAIC Continues Development of the Pharmacy Benefit Manager Licensure and Regulation Model Act
The proposed Pharmacy Benefit Manager Licensure and Regulation Model Act (the PBM Model Act) establishes standards and criteria for the licensing and regulation of pharmacy benefit managers (PBMs) providing claims processing services or other prescription drug or device services for health benefit plans.
6. NAIC Committee Adopts Real Property Lender-Placed Insurance Model Act
During the Fall Meeting, the Property and Casualty Insurance (C) Committee adopted the Real Property Lender-Placed Insurance Model Act (the LPI Model Act), which establishes a legal framework within which lender-placed insurance on real property (LPI) may be written in a state and includes provisions to (i) maintain the separation between mortgage lenders and servicers, on the one hand, and insurers and insurance producers, on the other hand, and (ii) minimize the possibilities of unfair competitive practices in the sale, placement, solicitation, and negotiation of LPI.
7. NAIC Holds Special Session to Discuss Federal Mechanisms to Ensure Availability of Business Interruption Insurance
During the Fall Meeting, the NAIC Center for Insurance Policy and Research held a special session to discuss pandemic business interruption (BI) insurance coverage and possible federal mechanisms to ensure widespread availability of BI coverage for pandemics.
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