January 2013 • Vol. 5, Issue 1
PURPOSE OF LEGISLATIVE SPOTLIGHT
LEGISLATIVE SPOTLIGHT is produced by NAIFA and is supplied to the Society of Financial Service Professionals as a collaborative effort that seeks to raise federal and state regulatory awareness for financial service professionals. The essential purpose is to facilitate understanding and a more fruitful dialogue with constituents and/or clients with regard to these important issues.
Speaking as one, we can and will make a difference.
Comments on Legislative Spotlight: Contact Ron Panneton with comments or suggestions concerning this newsletter.
NAIFA Staff Attends NAIC Fall Meeting
The National Association of Insurance Commissioners (NAIC) held its 2012 Fall meeting in National Harbor, MD November 29-December 2, 2012. Four members of the NAIFA Government Affairs staff attended the meeting on behalf of NAIFA. Overall attendance at the meeting was approximately 2000. The following matters of interest to NAIFA and its members, among others, were discussed and/or acted upon:
Election of Officers:
- President: Louisiana Insurance Commissioner Jim Donelon
- President-Elect: North Dakota Insurance Commissioner Adam Hamm
- Vice President: Montana State Auditor and Commissioner of Securities and Insurance Monica J. Linden
- Secretary-Treasurer: Pennsylvania Insurance Commissioner Michael F. Consedine
NAIC CEO Retires:
Terri Vaughan, NAIC CEO, retired on November 30. Vaughan served as NAIC CEO since February 2009. During her career, she also served as Iowa Insurance Commissioner and is a past NAIC President.
NAIC Adopts Valuation Manual:
The NAIC voted by a supermajority of the membership to adopt the Valuation Manual. The manual contains details of a principles-based approach to establishing insurance company reserves. The manual also defines the methods used by regulators and insurers to calculate the reserves of insurance companies. The principles-based reserving (PBR) approach incorporates factors beyond interest rates and mortality to better capture portfolio risks and ensure corporate solvency.
The Producer Licensing Task Force:
- Adopted the updates to the State Licensing Handbook. (NAIFA provided extensive comments)
- Adopted Uniform Business Entity Licensing Standards;
- Discussed State Perspectives on the Role of Navigators under the Affordable Care Act including reviewing a discussion framework for certification of Navigators.
ERISA Retirement Income (A) Working Group:
This newly-formed Working Group is tasked with seeking clarification from the DOL on its existing safe harbor for fiduciaries who sell annuities to defined contribution plan providers, especially as it relates to contracts that provide a guaranteed lifetime income. The Working Group will begin to gather information surrounding this issue, and will begin discussions with DOL and try to better explain how states work to determine a company’s solvency.
Why It Matters: State regulation of the insurance industry will remain the major regulator of the insurance business. Following the laws and regulations being worked on and considered by this group is critical to protecting the interests of NAIFA members and their clients.
To Learn More: Contact Bill Anderson at Wanderson@naifa.org.
Federally-Facilitated Exchanges Propose Fair Agent Compensation
A Health and Human Services (HHS) Notice released on November 30 includes a NAIFA-backed proposal to include fair agent compensation in the federally-facilitated exchanges (FFE). In a new paragraph s. 156.200(f), it is proposed that Qualified Health Plans (QHP) certification by an FFE and an FF-SHOP be conditioned on the QHP issuer paying similar broker compensation for QHPs offered through a FFE or FF-SHOP that it would pay for similar health plans offered outside an FFE and an FF-SHOP.
Other key provisions include:
- Reducing the incentives for health insurance issuers to avoid enrolling people with pre-existing conditions
- Stabilizing premiums in the individual market for health insurance
- Protecting health insurance issuers against uncertainty in setting premium rates
- Assisting low and moderate-income Americans in affording health insurance on Exchanges
- Exchange User Fees
Why It Matters: To insure that the health insurance consumer has access to the counsel and guidance of a health insurance producer the producer must be adequately compensated. Otherwise, the consumer will be forced to make decisions on health coverage without the advice of a licensed health professional.
To Learn More: Contact Diane Boyle at Dboyle@naifa.org.
For more on NAIFA: