March 8, 2024 Global Bankers Insurance Group (North Carolina)

NC Court of Appeals Affirms Order of Liquidation against CBLIC & BLIC

On March 5, 2024, the North Carolina Court of Appeals issued a unanimous decision affirming the Order of Liquidation against Colorado Bankers Life Insurance Company (CBLIC) and Bankers Life Insurance Company (BLIC). Specifically, the Court of Appeals held that both CBLIC and BLIC were insolvent because their assets did not exceed their liabilities, pursuant to N.C. Gen. Stat. § 58-30-10(13), at the time the Commissioner petitioned for liquidation.

The Court of Appeals also held that GBIG Holdings, LLC (GBIG), the sole shareholder of CBLIC and BLIC, lacked standing to defend against liquidation and that the Receivership Court aptly denied GBIG’s motion to continue the hearing to allow discovery. Please contact Michael McDonald if you would like a copy of the order.

Task Force Chair - John Colpean;   Staff Contact - Bill O'Sullivan

Hotel Deadline for April MPC Meeting Approaching

The reservation deadline at the Grand Hyatt Denver, the host hotel for NOLHGA’s April 2024 MPC meeting, is March 26. After that date, the NOLHGA rate of $249/night plus tax will no longer be available. The room block could sell out earlier than that, so we encourage everyone to book their rooms as soon as possible.

The April 2024 MPC meeting website offers online hotel reservations as well as both in-person and online registration for the meeting, which will be held on April 18 and 19. An agenda for the meeting will be released next week, but we expect the meeting to run all day on April 18 and until noon or so on April 19.

If you have any questions about the meeting, please contact Sean McKenna. If you have any trouble accessing the meeting website, please contact Dan Hicks.

  Staff Contact - Sean McKenna

NAIC Updates

The following are updates on various NAIC activities:

Reinsurance Task Force Holds Call In Lieu of Meeting in Phoenix: The Reinsurance Task Force met last week in lieu of holding a meeting at the NAIC’s Spring National Meeting in Phoenix (meeting materials can be found here). The task force received reports from several NAIC groups working on reinsurance-related issues:

Report from the Reinsurance Financial Analysis Working Group (ReFAWG): The working group, which meets in regulator-only sessions, has approved 41 Certified Reinsurers and 77 Reciprocal Jurisdiction Reinsurers for passporting. To date, 43 states have passported a Reciprocal Jurisdiction Reinsurer, with that number expected to climb in 2024. The working group continues to promote the redesigned Certified and Reciprocal Jurisdiction Reinsurer webpage as a useful resource for regulators and industry.

Mutual Recognition of Jurisdictions Working Group: As reported in prior meetings, the working group is following anticipated changes in Bermuda, Japan, and the UK’s regulatory regimes and will factor such changes into its annual review of whether these jurisdictions meet the Qualified and Reciprocal Jurisdiction standards.

Asset Adequacy Analysis of Ceded Business: Dave Wolf (New Jersey) provided background on the concept of requiring asset adequacy analysis for ceded reinsurance business using a cash flow testing methodology—the Life Actuarial Task Force (LATF) currently is considering this concept but has not made a formal exposure. The LATF has put this item on its agenda for the afternoon of March 14 to allow people traveling to Phoenix that day to participate in the conversation.

Ongoing Projects Affecting Reinsurance: The task force also received updates on other reinsurance-related topics, including the Valuation of Analysis Working Group’s (VAWG) review of AG 53 submissions, VAWG’s referrals to the Statutory Accounting Principles Working Group, and the impact of banking insolvencies on the NAIC’s List of Qualified U.S. Financial Institutions for providing letters of credit as collateral for reinsurance. Finally, the task force requested feedback from regulators on the form and function of the reinsurance worksheet (the Excel file can be found here) adopted by the Macroprudential Working Group last year.

GCC Working Group Adopts 2023 Life and Japan Health Scalars: Following a presentation from Oliver Wyman, the Group Capital Calculation (GCC) Working Group adopted updated life and Japan Health scalars for the 2023 GCC formula. Last year, the ACLI engaged Oliver Wyman to 1) develop updates to existing scalars for use in the 2023 formula; and 2) recommend a process for maintaining the scalars on an ongoing basis. Only the scalars set forth on slide 5 of Oliver Wyman’s deck (page 8 in the meeting materials) will be updated—all others will carry forward from the 2022 formula. The 2023 template will be updated and put on the working group’s website.

Oliver Wyman also proposed a process to monitor and update the scalars on an ongoing basis (see slide 17 of the deck—page 20 of the meeting materials). The working group directed NAIC staff to prepare a proposal capturing this process for the working group to consider.

SCORI Life Workstream Solicits Comments on Three Items: Last week, the life insurance workstream of the Special Committee on Race and Insurance (SCORI) met to discuss barriers to access and the role of financial literacy, seeking comment on the following items by April 1:

Draft Financial Literacy Course Endorsement: Following a presentation from Champlain College on the 2023 National High School Report Card, which rates how states address financial literacy requirements in high school, Commissioner Humphreys (Co-Chair – Pennsylvania) introduced a draft course endorsement statement that supports state legislation to require financial literacy education in schools. Specifically, the document recommends that state insurance departments work with financial regulators, state departments of education, and state legislators to promote financial literacy coursework with an insurance component as a prerequisite to graduation. The document attempts to avoid making any definitive statements regarding funding, training, or curriculum since state processes on how to address those topics are likely to differ.

Barriers to Access & Coverage: The workstream is asking for general comments on any barriers to access to life insurance products. In the meantime, the workstream will discuss criminal history as a potential barrier during its next call in March. Commissioner Humphreys and Commissioner Fowler (Co-Chair – Alabama) are developing a survey for life insurance companies to examine existing operating and underwriting policies to get a better idea of how criminal history is handled in the application process.

Financial Wellness Resource Guide: This guide details the financial wellness plans in Maryland, Oregon, and Washington, D.C. Those jurisdictions were the only three that responded to a survey on the topic, and the workstream is soliciting information from additional states on their financial literacy programs.

  Staff Contact - Sean McKenna