2018年-普华永道全球_NAIC_2018_Fall_National_Meeting_PwC_22页_579kb

PwC NAIC Newsletter Summary - December 2018

Core Content Overview

The December 2018 issue of the PwC NAIC Newsletter outlines key activities and decisions made by various NAIC committees, task forces, and working groups during the Fall National Meeting in San Francisco and subsequent conference calls. The summary includes updates on statutory accounting principles, reinsurance models, risk-based capital (RBC) developments, and cybersecurity and big data initiatives.

Main Topics and Key Information

1. Executive Committee and Plenary

• Elected new officers for 2018: Superintendent Eric Cioppa (ME), President; Director Raymond Farmer (SC), President-Elect; Commissioner Gordon Ito (HI), Vice-President; and Director Dean Cameron (ID), Secretary-Treasurer.
• Approved:
  • Amendments to Actuarial Guideline XLII (AG 42)
  • Three new model acts/regulations: Limited Long-Term Care Insurance Model Act, Limited Long-Term Care Insurance Model Regulation, and Travel Insurance Model Act
  • Bulletin Regarding Arbitration Clauses and Choice-of-Law/Venue

2. Innovation and Technology Task Force

• Cybersecurity Initiatives:
  • South Carolina is the first state to adopt the Insurance Data Security Model Law (#668), which is a high priority for the NAIC.
  • The U.S. Treasury has endorsed Model #668, and the task force emphasized the need for other states to adopt it promptly to ensure uniformity.
• Big Data:
  • The working group discussed data accuracy, validation methods, and challenges in evaluating predictive models used in life underwriting.
  • A survey on skills and resources for reviewing predictive models was shared, with 51 jurisdictions responding.
  • The task force is developing a framework for consistent regulatory review of predictive models, with a draft white paper exposed for comment until January 15.
• Guest Innovators:
  • Discussed innovative life insurance products, renters insurance, and the use of state innovation divisions to speed up market entry.

3. Statutory Accounting Principles Working Group

• SSAP 108: Adopted for derivatives hedging variable annuity guarantees, effective January 1, 2020, with early adoption permitted from January 1, 2019.
• SSAP 86: Finalized guidance to simplify hedge effectiveness documentation, effective January 1, 2019.
• SSAP 61R and 62R:
  • Revised SSAP 61R to address concerns over YRT reinsurance premiums.
  • SSAP 62R was updated to reflect U.S. GAAP guidance from EITF 93-6.
• Structured Notes and Surplus Notes:
  • Considered classifying structured notes (except mortgage-referenced) as derivatives.
  • Rejected the derivative treatment for surplus notes linked to non-subordinate structures, with industry concerns about unintended consequences.
• SSAP 101 Revisions: Addressed changes due to the 2017 Tax Cuts and Jobs Act, including updates to deferred tax item reversal patterns and illustrative examples in Q&As.

4. Blanks Working Group

• Adopted three proposals for year-end 2019 reporting:
  • Additional instructions for the reformatted Life and Fraternal Analysis of Operations and Analysis of Reserves schedules.
  • Added a Summary page to the Analysis of Operations schedule.
  • Updated the Summary Investment Schedule to align with different investment schedules and the Assets page.
• Exposed 8 items for comment, including:
  • Adding questions 34.1 and 34.2 to the Life annual statement.
  • Revising AVR factors to align with RBC after-tax factors.
  • Removing "contract loans" from the separate accounts asset page.

5. Risk-Based Capital (RBC)

• Investment RBC:
  • Bond factors for 2020 implementation were under discussion; the 2019 implementation date was deemed unfeasible.
  • The AAA recommended bond portfolio adjustments for health RBC, which the Health RBC Working Group agreed with.
• Life RBC:
  • A document explaining the impact of the 2017 Tax Cuts and Jobs Act on RBC results was exposed for comment.
  • Estimated increase in required capital ranges from 5% to 15%.
  • A revised draft is expected for early 2019.
• P/C RBC:
  • New underwriting risk "line 4" factors were proposed, with capped factors for Commercial Insurance, Medical Professional Liability, and All Other Lines, and uncapped for Personal Lines and Reinsurance Lines.
  • Effective date for the proposal is 2019.
  • Consensus reached on studying whether wildfire risk should be included in catastrophe risk.

6. Valuation of Securities Task Force

• Extended the effective date of private letter ratings from December 31, 2018 to January 1, 2019.
• Changed the "NR" symbol to "ND" (not designated) effective December 31, 2019.
• Adopted amendments to eliminate the MFE process from the P&P Manual.
• Directed the Structured Securities Group to investigate expanding modeling coverage to include all non-agency RMBS and CMBS.

7. Reinsurance Task Force

• Adopted revised credit for reinsurance models reflecting the U.S./EU Bilateral Agreement.
• Final action was deferred pending review by the U.S. Treasury and U.S. Trade Representative.

8. Life Actuarial Task Force

• Adopted significant Valuation Manual (VM) amendments, including removing the $450% RBC threshold for PBR exemption.

9. Financial Stability Task Force

• Re-exposed documents on a possible liquidity stress testing framework for large life insurers.

10. Casualty Actuarial and Statistical Task Force

• Continued work on defining minimum educational requirements for appointed actuaries.

Additional Context

• The 2018 mid-term elections resulted in seven states changing from Republican to Democrat control, potentially leading to changes in NAIC committee leadership in early 2019.
• All referenced documents can be found on the NAIC website (naic.org).