Group Capital Calculation adopted and new slate of officers chosen.
- Timothy Darragh
- January 2021
Members of the National Association of Insurance Commissioners have adopted a Group Capital Calculation along with model legislative language designed to enable it after state legislatures adopt it.
The NAIC's Group Capital Calculation (E) Working Group developed the GCC in a project that began in 2015, it said in a statement. It provides U.S. solvency regulators with an additional analytical tool for conducting groupwide supervision, it said.
According to the NAIC, it will quantify risk across an insurance group and provide transparency into how capital is allocated. In addition, it provides key financial information on the insurance group to assist regulators in understanding the financial condition of noninsurance entities, among other benefits.
“The GCC provides yet another analytical tool added to state insurance regulators' toolbox on group supervision since the 2008 financial crisis, and will complement the Form F Enterprise Risk Report, Own Risk and Solvency Assessment reporting and the Corporate Governance Annual Disclosure,” said David Altmaier, Florida insurance commissioner and chairman of the NAIC's Group Capital Calculation Working Group. “All of these tools have been developed in a way that is cost-effective and appropriate for the U.S. system, with the GCC being less costly and burdensome than other 'consolidated approaches,' and in a way that respects other jurisdictions' existing capital regimes.”
The NAIC's work on the capital calculation was developed while the International Association of Insurance Supervisors works on plans to implement a global insurance capital standard intended to bridge differences between jurisdictions in valuation regimes.
The National Association of Mutual Insurance Companies said finalization will give state insurance regulators the tools they need to demonstrate the strength of the U.S. system to regulators in the European Union and around the world, said Jon Bergner, vice president of public policy and federal affairs, NAMIC.
However, NAMIC is disappointed by the “last-minute” decision to remove a limited filing option for domestic insurance groups that have a Risk-Based Capital filing entity at the top of the group structure, he added.
“The full GCC filing doesn't provide any information the RBC filing does not, and it is unfortunate that the principle of 'shared compliance pain' won out over the principle of efficient regulation,” Bergner said.
An attempt to obtain comment from the IAIS was not immediately successful.
In other NAIC news, at the close of its Fall 2020 National Meeting, the NAIC elected its officers for 2021.
Florida Insurance Commissioner David Altmaier will serve as president; Idaho Insurance Director Dean L. Cameron will serve as president-elect; Missouri Insurance Director Chlora Lindley-Myers will serve as vice president; and Connecticut Insurance Commissioner Andrew Mais will serve as secretary-treasurer.
They will assume their duties on Jan. 1. The election of officers is held annually at the NAIC's Fall National Meeting, the NAIC said in a statement.