WASHINGTON, D.C., March 27, 2013- The American Insurance Association (AIA) will unveil its updated group-wide supervision principles at the National Association of Insurance Commissioners` (NAIC) Spring National Meeting taking place April 6-9 in Houston, Texas. As property-casualty insurers and regulators continue to focus on group-wide supervisory efforts, AIA`s updated policy principles will center on the continued financial regulation and supervision of insurance groups as those issues continue to arise domestically and internationally.
"AIA has been actively engaged with its member companies to refine a set of principles on the nature and extent of group-wide supervision originally adopted last June," said Stephen ("Stef") Zielezienski, AIA senior vice president and general counsel. "We recognize that group-wide supervision is on-going and will continue to evolve, but it must not inhibit the growth of private markets and the ability of insurance companies to compete effectively."
On Saturday, April 6, Zielezienski will discuss AIA`s revised group-wide supervision principles during his testimony before the NAIC/Industry Liaison Committee Meeting`s Group Supervision Panel. In his testimony, Zielezienski will state that group-wide supervision should not result in a competitive disadvantage for insurers and that it should focus on both understanding the group being scrutinized and fostering an environment of cooperation, coordination, and communication among participating regulators. Group-wide supervision should not be used to add new regulatory layers or to compare groups to one another.
Zielezienski will also state that with the transparency and access implied by the supervisory focus on the group itself comes a need to protect against disclosure of confidential business-sensitive data provided by the group to regulators. "Transparency and confidentiality go hand-in-hand," said Zielezienski.
The NAIC`s Corporate Governance (E) Working Group will be meeting on Sunday, April 7 and is expected to finalize policy decisions regarding proposed enhancements to U.S. corporate governance principles. It is also expected that the Working Group proposals will lead to the development of a model law and additional annual corporate governance filing requirements and disclosures.
"AIA supports good governance practices," said Adam Kerns, AIA assistant general counsel. "We look forward to working with the Corporate Governance Working Group to ensure that any new annual corporate governance filing requirements and disclosures are not duplicative of existing regulations and that the strictest confidentiality standards apply to any additional disclosures."
Also on Sunday, April 7, the Group Solvency Issues (E) Working Group will meet to address various issues dealing with group supervision, including the exposure of proposed changes to the Financial Analysis Handbook for Roles and Responsibilities of U.S. Lead State/U.S. Group Wide Supervisor. During the meeting, the Working Group is expected to discuss the process of defining a group-wide supervisor and to report back to the Solvency Modernization Initiative (SMI) Task Force.
"In considering a definition, there should only be one group-wide supervisor even though there may be a number of legal entity regulators for different companies within an insurance group," said Kerns. "Supervisory roles and responsibilities should be non-duplicative, and should not be confused with regulatory enforcement authority that may be exercised by individual regulators with respect to legal entities operating within their respective jurisdictions."
The NAIC`s Speed to Market (EX) Task Force Commercial Lines (EX) Working Group will hold its inaugural meeting on Friday, April 5. AIA had requested, on behalf of its members, the NAIC explore the continuing need for commercial lines modernization. At its first meeting, the Commercial Lines Working Group is expected to solicit comments from interested parties on ways to improve the filing and approval process for commercial lines carriers.
"AIA and its members are most appreciative of the NAIC and the Speed to Market Task Force for appointing the Commercial Lines Working Group," said Lisa Brown, AIA counsel and director of legal research and compliance resources. "We look forward to working with the Group to effect meaningful reforms in the commercial lines market."
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Source: American Insurance Association via Thomson Reuters ONE