NAIC meeting update: Summer 2017

Mid-year meeting advances cybersecurity initiative

The National Association of Insurance Commissioners (NAIC) 2017 Summer National Meeting tackled a number of important issues including cybersecurity, federal regulations, consumer protection, data management, and more.

NAIC meets in Philly

Held in Philadelphia, the NAIC Summer 2017 National Meeting was low-key, but a productive one. Cybersecurity, federal and state regulations, consumer protection, and data management were the dominant themes for this quarter’s gathering.

The complete recap of the NAIC Summer 2017 National Meeting includes a detailed summary of the accounting and reporting changes discussed, adopted, and exposed during the summer meeting and interim conference calls. The association’s leaders and members will continue their important work at the NAIC fall meeting to be held December 2–4 in Honolulu, Hawaii.

Cybersecurity model moves forward

After several missteps and delays, a new and approved cybersecurity model law was unveiled at the summer NAIC meeting. The milestone committee adoption and advancement came after solid industry objections to previous drafts of the model law, the development of which began in March 2016. Very similar to the regulations in place in New York state, this new model passed its first two tests in committee. It will now go to the joint session of the executive and plenary at the NAIC 2017 Fall National Meeting for final adoption.

The quest for higher standards in annuity sales continues

Discussion and some measure of disagreement continued on potentially revising annuity sales standards at the summer NAIC meeting. Concerns about the structure of producer compensation and its effect on the sale of annuities have been shared by both industry and consumer groups. Some have expressed concern that varying commissions and ancillary compensation may create a conflict of interest for producers, while others worry that without this compensation, the incentive to service the low- to middle-income market disappears. The latter was cited as a likely byproduct of the US Department of Labor’s (DOL) fiduciary rule—the merits of which were debated at length in this session.

Spotlight on federal and state regulatory policies

Ten years after the financial crisis, efforts to overhaul the US regulatory system to address issues in a timely and holistic fashion continue. Regulators are taking a closer look at long-term care products, even as the implementation of principle-based reserving (PBR) continues. Consumer protection remains a priority, including work on annuity suitability standards and the availability and affordability of auto insurance. Efforts around capital metrics and group regulation also continues. And the NAIC’s new Macro Prudential Initiative is another important step toward bolstering the confidence of insurance consumers and investors and further enhancing the credibility of the state system of insurance regulation.

Health care sessions work to look past uncertainty

Health care-centric task forces and workgroups focused their attention on looking to the future—considering options for the many possibilities associated with the repeal, replacement, or repair of the federal Affordable Care Act (ACA). This included getting educated on the industry’s ongoing evolution, including drivers of cost. The issues discussed spanned cost-sharing reduction (CSR) payments, high-risk pools, Medicaid, alternative models of health care coverage, and more. What will happen with the repeal, replace, or repair of the ACA is unknown, but the NAIC is focused on addressing the impact of state programs and their constituents.

These are just some of the highlights from the many discussions, debates, and initiatives that took place at the NAIC summer meeting. Read Deloitte’s comprehensive recap of the NAIC Summer 2017 National Meeting, which also includes a detailed summary of the accounting and reporting changes discussed, adopted, and exposed during the summer meeting and interim conference calls.

NAIC update collection

Missed the discussions and outcomes from the NAIC Spring 2017 National Meeting? Explore Deloitte’s collection of NAIC updates covering the National Association of Insurance Commissioner’s meetings.

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