Forward look: 

Explore insurance regulatory trends, challenges, and opportunities for 2015

The regulatory landscape for insurance will likely continue to be challenging and uncertain in 2015. As was the case in 2014, the insurance industry can expect to face new rules and modified requirements that could significantly affect how companies operate. Regulatory bodies in the US and abroad have been significantly expanding their compliance, oversight and enforcement activities in recent years, and this is a trend which is expected to accelerate and add to rule-making and overlapping of regulatory roles. This report highlights several key regulatory trends for the insurance industry in 2015.

Here's a quick look at the key trends insurance companies will likely need to focus on in 2015

1.       Dual regulation at the state and federal level – ​Regulation of the insurance industry in the US primarily has been the business of the states since the mid-19th century, beginning with New Hampshire's appointment of the first state insurance commissioner in 1851. But now emerging is an evolving hybrid model of dual State and Federal Regulation.

2.       Convergence of US and international regulatory principles – ​The US insurance industry faces increasing pressure to follow international regulatory standards.

3.       Own Risk and Solvency Assessment (ORSA) – The ORSA model developed by the NAIC goes into effect in 2015. ORSA will evolve over the next several years as regulators receive initial filings and provide feedback to the industry. Now is the time for action.

4.       Corporate governance – In 2014, the NAIC approved a framework for corporate governance, which requires the annual collection of information about an insurer's corporate governance practices.

5.       Use of Captives – The debate rages on over how to prevent insurers from using affiliated captives in ways that might enable them to evade accounting rules and reserve requirements.

6.       Principle-based reserving (PBR) – Uncertainty continues over the best way to determine reserve requirements for life insurance - with resolution in sight.

7.       Cyber security threats – Insurance companies are an increasingly appealing target for hackers and cyber theft and need to shore up their cyber defense before they are seriously compromised.

8.       Focus on annuities – ​Regulators are continuing to scrutinize annuity products, which are growing by leaps and bounds in the marketplace.