MPC Meets in San Diego
The Members’ Participation Council (MPC) held a meeting on January 29–31, 2025, in San Diego and online. The MPC General Session featured:
- Comments from NOLHGA Chair Joy Higa, who highlighted NOLHGA’s enhanced focus on technology and cybersecurity and also commented on the importance of the GA Administrator Roundtable (held the previous day) as a means to focus on teamwork and receive feedback from the members on various issues.
- The MPC Chair Report, during which new MPC Chair Amanda Barbera (Indiana) summarized the activity at the MPC Executive Committee meeting and also previewed the online webinar on the MPC Rules & Procedures, which will be held on February 18.
- The NOLHGA Management Report, in which NOLHGA President Katie Wade updated attendees on progress made in the three workstreams featured in NOLHGA’s strategic plan: (1) technology, systems, and documentation; (2) human capital; and (3) assessment services (the AssessConnect system for the member guaranty associations). She also included 2025 goals for all three workstreams. (Members can access the Management Report presentation in the members-only section of the NOLHGA website under MPC Meeting Materials & Reports.)
- Closed-session (affected guaranty associations only) presentations by the task forces for Global Bankers Insurance Group (North Carolina), North Carolina Mutual Life Insurance Company (North Carolina), Penn Treaty Network America/American Network Insurance Companies (Pennsylvania), and Senior Health Insurance Company of Pennsylvania (SHIP).
- Meetings of the MPC Executive Committee, Accounting Issues Committee, and the Senior Health Insurance Company of Pennsylvania (SHIP) Task Force.
- A GA Administrator Roundtable focusing on guaranty association operational issues (especially accounting), vendor relationships, and business continuity/succession planning.
- An IT Update from NOLHGA Director of Information Systems Dan Hicks.
- A presentation on Phase 1 of the AssessConnect system for member guaranty associations, conducted by NOLHGA Chief of Staff Jenn Webb, Dan Hicks (NOLHGA), Alexis Comrack (Comrack Consulting), and Adam Solove (Solove Consulting).
Two Insolvency Task Forces Formed
MPC Chair Amanda Barbera (IN) recently announced the formation of two task forces for companies owned by Advantage Capital Partners, known as A-Cap.
Subject to the MPC Rules and Procedures, a Task Force (Class III) has been formed for the purpose of monitoring the status of Atlantic Coast Life Insurance Company (ACL), NAIC# 61115, which is subject to a Confidential Order Imposing Administrative Supervision entered on April 10, 2024, by the South Carolina Department of Insurance. On December 11, 2024, an Order was entered instructing the company to cease writing all new business effective December 31, 2024. On December 20, 2024, the prior orders became public. ACL is licensed in 40 states and is not licensed in CA, CT, DC, ID, ME, MI, MN, NH, NJ, NY, and WI.
Frank Knighton (GA) has been appointed Chair of the ACL Task Force. Other task force members include AL, FL, PA, SC, TN, and TX.
A Class III Task Force has also been formed for the purpose of monitoring the status of Sentinel Security Life Insurance Company (SSL), NAIC# 68802, which is subject to an Emergency Order issued by the Utah Insurance Commissioner placing the company in hazardous financial condition and ordering the company to cease writing new business by December 31, 2024. The Utah Order also covers two reinsurance companies—Haymarket Insurance Company and Jazz Reinsurance Company. The Order became public on December 2, 2024. Sentinel is licensed in 36 states and is not licensed in AK, CT, DC, ME, MA, MI, MO, NH, NJ, NY, TN, VT, VA, WV, and WI.
Todd Thaker (CA) has been appointed Chair of the SSL Task Force. The other task force members include FL, OH, PA, TX, UT, and WA.
Lindsay Crawford, Jenn Webb and Katie Wade will be the NOLHGA staff contacts for both task forces, and Wilkie, Farr and Gallagher will be the outside counsel.
NAIC Updates
2025 NAIC Committee List Released: An initial NAIC committee list was released on January 30, 2025. While quite a few working groups, task forces, and subgroups are missing, here are some initial observations:
Capital Adequacy Task Force: Iowa Commissioner Doug Ommen takes over as Chair, replacing Ohio’s Judy French, who moves to Vice-Chair (represented by Tom Botsko). The task force lists Mike Yanacheak as Iowa’s representative, but both Carrie Mears and Kevin Clark are expected to contribute meaningfully, as well.
Reinsurance Task Force: California Commissioner Ricardo Lara will Chair, with Nevada Commissioner Scott Kipper serving as Vice-Chair.
Financial Stability Task Force: Rhode Island Director Beth Dwyer will serve as Vice-Chair. She also represents the NAIC on the Financial Stability Oversight Council (FSOC).
Special Committee on Race and Insurance: The list indicates “membership pending.” The NAIC has said the work of this committee will soon be absorbed under the relevant letter committees.
Several additional leadership changes were identified in the list:
- Climate and Resiliency (EX) Task Force: Scott Kipper (NV) has replaced Jeff Rude (WY) as the Co-Vice Chair.
- Regulatory Framework (B) Task Force: Grace Arnold – MN (Chair), Allan McVey – WV (Vice Chair), replace Glen Mulready – OK (Chair) and Ann Gillespie – IL (Vice Chair).
- Senior Issues (B) Task Force: Jon Godfread – ND (Vice Chair) replaces Peni Itula Sapini Teo – AS (Vice Chair).
- Surplus Lines (C) Task Force: Timothy Temple – LA (Vice Chair) replaces Cassie Brown – TX (Vice Chair).
- Antifraud (D) Task Force: Trinidad Navarro – DE (Chair), John King – GA (Vice Chair) (the two are switching roles from 2024).
- Accounting Practices and Procedures (E) Task Force: Mick Campbell – MO (Vice Chair) replaces Mike Causey – NC (Vice Chair).
LATF Exposes Revised Draft ReAAT AG: The Life Actuarial Task Force (LATF) discussed a revised draft of the draft actuarial guideline (AG) on the asset adequacy testing of reinsured business (ReAAT)—ultimately exposing the draft for a 28-day comment period ending February 28. Page one of the document contains a summary of the proposed changes from the prior draft AG, and Fred Andersen (MN) walked through these revisions on the task force’s January 30 call:
- Associated Party Concept: Andersen included the concept of “Associated Party,” which is broader than an affiliate or related party and would include (1) an entity that owns 1% or more of a reinsurer and (2) a reinsurer that assumes at least 25% of its reserves from one insurer or all insurers in a single holding company. Agreements within the scope of the AG involving Associated Parties would not be eligible for cash flow testing (CFT) exemptions pursuant to Section 5.H of the revised AG draft.
- 2025 “Disclosure-Only” Language: The revised draft contains the following language describing how the AG should be used for year-end 2025:
For year-end 2025, the Appointed Actuary should consider the analysis required to be performed by this Actuarial Guideline, along with other relevant information and analysis in forming their opinion regarding the potential need for additional reserves. In the event that the Appointed Actuary believes that additional reserves are required (based on their application of appropriate actuarial judgment), then the Appointed Actuary should reflect that in their Actuarial Opinion. This Guideline does not include prescriptive guidance as to whether additional reserves should or should not be held. As is already the case, such determination is up to the Appointed Actuary, and the domestic regulator will continue to have the authority to require additional reserves as deemed necessary.
- Starting Asset Amount for Testing: The revised draft proposes using the Post-Reinsurance Reserve Amount as the Starting Asset Amount for purposes of mandatory CFT (as those terms are defined in the AG). See Section 6 for additional details. As written, the draft would allow companies to perform an alternative run to show why using a different amount is justified. Section 6(B)(3)(iii) of the draft contains possible alternative run examples.
- Similar Memorandum: The draft AG continues to recognize that a Similar Memorandum may be an appropriate alternative to CFT in some instances. The revised draft contains new language emphasizing the importance of readability and ease of access to key information as an important element regarding whether a Similar Memorandum can be used in lieu of CFT.
- Situations Where CFT Is Required: The revised draft outlines certain criteria where a ceding company’s domestic regulator could grant an exemption to CFT. Arrangements that do not satisfy those criteria (e.g., those involving an Associated Party) would not be eligible to seek an exemption.
- NY 7 Requirements: The draft AG includes a requirement that the ceding company perform projections on at least the New York 7 risk-free interest rate scenarios. Regulators raised the idea of expanding this beyond the current draft AG, but no decision was made on that topic.
- Timeline: The task force has the ambitious goal of adopting the AG by the end of May to allow the Life Insurance and Annuities Committee to discuss it in advance of the Summer National Meeting in August. The current plan is to hold one more call in early March to discuss comments received on the exposure and continue discussions at the Spring National Meeting.
IAIS Publishes 2025–2026 Roadmap
The International Association of Insurance Supervisors (IAIS) published its 2025–2026 Roadmap that details upcoming projects and expected activities at the IAIS over the next two years in support of its Strategic Plan. Key items include:
- The draft Issues Paper on Structural Shifts in the Life Insurance Sector will be published for consultation in March and finalized by the end of the year. In addition, analysis of cross-border asset-intensive reinsurance and the increased use of alternative assets will be included in the Global Insurance Market Report (GIMAR) again this year.
- The IAIS Global Seminar (virtual) is scheduled for July 8–10.
- The IAIS will embed cyber and artificial intelligence into the Global Monitoring Exercise.
- The Insurance Capital Standard (ICS) implementation phase begins this year, starting with development of the ICS and Final Aggregation Method (AM) assessment methodologies, followed by baseline self-assessments in 2026. The IAIS also will develop new ICS-related standards, expected to be published for consultation in 2026.
- The IAIS is reviewing Holistic Framework supporting material related to supervision, liquidity risk management and planning, and recovery and resolution planning to determine what updates are needed (as a result of the updated Insurance Core Principles (ICPs) and ComFrame standards adopted in December). Updates will be published for consultation at the end of the year.
- A public report on the results of the Targeted Jurisdictional Assessments (TJAs) for Australia, Bermuda, Italy, Singapore, South Africa, and Spain will be published in 2026. This year, a second TJA exercise will be conducted on the original 10 jurisdictions (which include the United States) to update the implementation status across all 16 jurisdictions.
- Implementation assessments on the qualitative elements of ComFrame will begin in 2026.
Art Dummer Passes Away
Art Dummer, longtime Executive Director of the Utah Life & Health Insurance Guaranty Association and a key figure in the founding of the guaranty system, passed away on January 23, 2025. He was 91 (his obituary can be found here).
Art, a former Chair of the NOLHGA Board of Directors, simultaneously served as Task Force Chair for two of the largest insolvencies in the history of the guaranty system—Executive Life Insurance Company (CA) and Mutual Benefit Life Insurance Company (NJ)—which took place on different coasts. He served on more than 10 insolvency task forces overall, as well as a large number of NOLHGA committees, including the Coverage/Claims Committee. He was a Fellow of the Society of Actuaries and a Member of the American Academy of Actuaries.
Art was considered one the “founding fathers” of the guaranty system, and he was kind enough to discuss his career with the Utah association and NOLHGA at the April 2024 MPC meeting—a recording of the discussion can be found here (login required).
Art was a friend to many in the guaranty community, and NOLHGA expresses our deepest sympathies to his family and his many friends.
Staff Contact - Sean McKenna