Insolvency Cost Information Report Now Available on NOLHGA Web Site

NOLHGA has issued its annual Insolvency Cost Information Report, which assists member companies in establishing accruals for life, annuity, and health guaranty association assessments pursuant to Statement of Statutory Accounting Principle No. 35 - Accounting for Guaranty Fund and Other Assessments (finalized March 2000 by the NAIC) and SOP 97-3 - Accounting by Insurance and Other Enterprises for Guaranty Fund and Certain Other Insurance-Related Assessments (released December 1997 by the AICPA). The report contains information regarding the cost of insolvencies, assessable premium by state, and summaries of each state's general assessment and premium tax offset provisions.

These reports have been issued by NOLHGA annually since 1992. This year's report will not be published in hard-copy format. Instead, it is available for download from NOLHGA's Web site. It is also accessible through the homepage in the "Insolvency Corner" section.

The report contains the following data files:

Costs: An Excel workbook with individual insolvency cost information along with various summary schedules and premium information by state.
Report: A PDF file that includes commentary on various insolvencies along with the schedules from the Costs file. Also included are general assessment and premium tax offset state provisions along with premiums by state.
Download: A WinZip file containing both files.

Please note that some of the financial schedules will print in very small text (particularly the summary schedules on pages 5 to 7 of the PDF file) and may be difficult to read. If the text is too small, it might help to set those pages to legal size and print them separately from the rest of the report.

Also, for the first time since 1992, summary assessment called and refunded information has been included on each insolvency case for use by member companies in their accrual process as they deem necessary. This information is compiled from the annual assessment submissions of each guaranty association. It is not audited by NOLHGA; therefore, NOLHGA will not be able to address any questions that member companies may have on the accuracy or completeness of the information. Those inquiries will be directed to the appropriate guaranty association.

Finally, the Insolvency Financial Reports that were previously distributed by NOLHGA will no longer be published in hard copy. Rather, the related insolvency information can now be obtained directly from the Company Information section on NOLHGA's Web site. To access this information, you must log in to the site with your password. The link to the Company Information section is under "member content" in the list of links on the left side of the page after you log in. Users can select a company from the list of Companies in Receivership and then select "Insolvency Reports" from the "Financial Reports" menu at the top of the screen. The information can be viewed by line of business or by state, and various column headers can be expanded for more detail. If you have any difficulty accessing the data, please contact Dan Hicks at [email protected] or 703.787.4112.

NAIC to Consider Formal Adoption of Proposed New Receivership Model on December 4

On November 8, 2005, the NAIC's Financial Condition (E) Committee voted to approve a revised version of the proposed new model receivership act and to recommend the new model for formal adoption by the NAIC in conjunction with the NAIC's Winter National Meeting in Chicago in early December. Copies of the proposed model and recent comment letters can be accessed on the NAIC Web site. The model is listed as "Insurer Receivership Model Act" and is posted under "Draft Model Acts and Regulations" on the left side of the Web page.

E Committee has confirmed that the proposed new model will be presented to the NAIC's Executive (EX) Committee and Plenary with a recommendation for adoption in connection with the December NAIC meeting in Chicago. According to the NAIC's preliminary agenda, the joint EX/Plenary session has been scheduled for 2:30 p.m. to 4:00 p.m. on December 4.

To the extent the revised model is formally adopted by the NAIC at this meeting, it will likely then be referred to the NAIC's Financial Regulation Standards and Accreditation (F) Committee for consideration as an accreditation standard for the states. NOLHGA will continue to monitor developments with respect to the proposed new model, as well as accreditation review, and will continue to provide updates to its members.

NOLHGA Office Closed for Thanksgiving

The NOLHGA office will close early today (at 1:00 p.m. eastern time) and will also be closed Thursday and Friday for the Thanksgiving holiday. The NOLHGA staff wishes everyone a happy holiday.