Legislation Introduced to Create Federal Insurance Adviser

After an April 16, 2008, hearing in his subcommittee on insurance regulatory improvements, Congressman Paul E. Kanjorski (D-Pa.) introduced bipartisan legislation this week that would create a federal Office of Insurance Information within the Department of the Treasury. The "Insurance Information Act of 2008" (H.R. 5840) creates a federal insurance adviser to provide advice and expertise on insurance regulation to the Administration and Congress. The bill comes in the wake of concerns about the federal government's lack of insurance expertise following the September 11 terrorist attacks, Hurricane Katrina, and problems in the bond insurance marketplace.

Rep. Kanjorski, Chairman of the House Financial Services Capital Markets, Insurance, and Government Sponsored Enterprises Subcommittee, explained, "the Office of Insurance Information would provide an effective way to help Congress and the federal government make better decisions regarding national and international insurance policy."

For a copy of H.R. 5840, contact Meg Melusen at [email protected].

MPC Briefing Book & Administrators Education Day Schedule Posted

The briefing book for the April 2008 MPC meeting has been posted to the meeting Web page, as has a schedule for the April 29 Administrators Education Day. The briefing book and schedule can be found in the Meeting Resources section. Users may need to log in after clicking on the link to access the briefing book.

Education Day and the April 30 MPC meeting (some committee and task force meetings will be held April 28 and May 1) will be held at the Raleigh Marriott Crabtree Valley in Raleigh, North Carolina. The meeting Web page features more information on the meeting as well as online meeting registration.

Due to the confidential nature of the briefing materials, only NOLHGA Board members, guaranty association administrators, members of guaranty association boards, and other association representatives who will attend the meeting as the designated voting guaranty association representative can access the briefing book. Other guaranty system representatives who need a particular insolvency status report should contact the appropriate NOLHGA staff contact.

The briefing book includes the MPC meeting schedule, an attendee list, status reports for the upcoming meeting, and other meeting materials. It is in PDF format, and users will need Adobe Acrobat Reader to view and print the materials. Acrobat Reader is available free from Adobe.

Petrou of Federal Financial Analytics Slated for Legal Seminar

Karen Shaw Petrou, co-founder and Managing Partner of Federal Financial Analytics, Inc., will speak at the NOLHGA Legal Seminar in Boston in July. Petrou is a frequent speaker on topics affecting the financial services industry and has testified before Congress and federal government agencies. She has also authored numerous articles in professional financial sector publications as well as general-interest media such as The New York Times and Wall Street Journal. At the seminar, Petrou will join a roundtable discussion of insurance regulatory modernization that will include Illinois Insurance Director Michael McRaith, ACLI President Frank Keating, and NOLHGA President Peter Gallanis.

Prior to founding her own firm in 1985, Petrou worked in Washington as an officer at Bank of America. She is an honors graduate in Political Science from Wellesley College and earned a Masters Degree in Political Science from the University of California at Berkeley.

NOLHGA's 2008 Legal Seminar will be held July 17-18 at Boston's Fairmont Copley Plaza Hotel (a NOLHGA MPC meeting will take place on July 15 and 16). Hotel reservations can be made by calling 617.267.5300, and a special rate of $219/night is available for the entire week and weekend (a few smaller, single rooms are available at $209/night).

NAIC Updates IRMA for State Accreditation Standards

In June 2007, the NAIC's Financial Regulation Standards and Accreditation Committee (FRSAC) voted to expose the NAIC's Insurer Receivership Model Act (IRMA) for incorporation into state accreditation standards. The one-year exposure period began on January 2 and will run through year-end 2008, to be followed by a hearing in the spring of 2009.

Under the current Part A Financial Accreditation Standards, the NAIC requires that a state have a statutory "receivership scheme" in place that is similar to that contemplated under the NAIC's predecessor receivership model but does not require that states adopt the NAIC's receivership model or any specific statutory language that is "substantially similar" to that set forth in the model. FRSAC has indicated that, if adopted, an IRMA-based standard would be implemented under the current "statutory scheme" approach, rather than the NAIC's more stringent "substantially similar" standard.

During 2007, two amendments to IRMA were adopted by the NAIC. The first was a revision to the distribution priority provision to address certain mortgage and financial guaranty policies. The second added a new provision addressing large deductible reimbursements in property and casualty insolvencies. These amendments, however, were not included with the exposure copy of IRMA released by FRSAC in January. At a meeting on March 29, FRSAC considered whether a new exposure period would be required to include these amendments in the proposed accreditation standards.

Based on input from the NAIC's Legal Division, FRSAC concluded that neither of these amendments is significant for purposes of accreditation because the determination of whether a state has a receivership scheme similar to that set forth in IRMA would not depend on whether the state had adopted the language in either of these provisions.

That being the case, FRSAC decided to update the released exposure document to reflect the amendments, instead of beginning a new exposure period for these amendments. The exposure period for the updated model ends on December 31. Comment letters from interested parties should be sent to the attention of Julie Glaszczak, Senior Accreditation Manager, at [email protected].