I wrote to highlight a blog post redwaterlily wrote over at her blog discussing the current rule change by KWS to reduce the reserve requirements by life insurers — reserves intended to try to ensure that these companies are adequately funded to pay policyholder claims.
The conversation continued over at that post on a number of different fronts, but I want to go back to the reserve requirements, as KWS’s Chief of Staff has added to a comment in that thread.
While I don’t see a ton of news releases, I was struck by how this one was written. It goes through the history of a review of these reserving requirements via analysis groups at an industry trade association (NAIC) and how this association rejected the Life Insurance Industry group’s request for a broad recommendation for reserve “relief”. You can see the summary of that meeting here — this is the NAIC’s own Press Release. This is how Elliot Jacobson characterizes the current position of the NAIC:
On January 29, 2009, the Executive Committee of the NAIC decided to withhold their support of this relief on a national, uniform basis for the 2008 year-end preliminary annual statement filings that are due March 1st due to the inadequate time to perform the necessary evaluation.
The NAIC actually voted against these life insurance industry proposals, saying:
“Today’s vote reflects our belief that it is not appropriate to make emergency, permanent industry-wide changes for which the need has not been demonstrated.”
You should read the whole thing yourself, but even the NAIC decided that there was not enough information to demonstrate that the industry had any real need of relief at this time. Further, they caution against rushing to provide help where the need is not yet proven. This ruling, of course, doe not restrict these companies from appealing directly to the states, which is exactly what has been happening. Elliot Jacobson says that the list of states granting such relief is up on the NAIC website, which I can’t find. (And it may be there, this is a tough to navigate website, I think.) A Google search turns up Ohio as an approver of some reserve relief and Virginia and NH as against.
Elliot’s press release also refers us to the NAIC website for the insurers who got this relief. Why wouldn’t the ICs office just say who they are? It is only three companies and in a release this long, it wouldn’t take up much room. And why wouldn’t these just be listed on the Delaware IC’s website? In any event, I can’t find these on the NAIC website.
