The NAIC’s Spring meeting in Denver last week offered several informative sessions. As anticipated, many discussions focused on “hot topics” currently facing the insurance industry including the marketing of annuities, policy form readability standards, the Climate Risk Disclosure Survey, and issues affecting seniors such as long-term care insurance and Medicare Supplement insurance. Some highlights for me included:
- The Annuities Model Regulation was revised to include additional clarification about insurers’ responsibilities for compliance.
- The Climate Risk Disclosure Survey was also modified in terms of content, as well as in terms of insurer completion and state participation.
- Discussion on long term care insurance included a discussion of the CLASS Act, part of the federal “Patient Protection and Affordable Care Act” signed into law last week. This portion of the health care reform bill creates a national long term care insurance program. Additional evaluation of this program’s ability to impact or complement existing private long term care insurance can be expected.
On a related note, and as a follow-up to a concern previously expressed about Stranger Originated/Owned Annuities, the NAIC announced an upcoming public hearing on this subject. The hearing will be held in Washington, D.C. on May 20th. Testimony from the insurance industry, state insurance regulators, and consumers is expected. This annuities practice has received media attention recently and is similar in scope to what the industry witnessed in the sales of Stranger Originated Life Insurance. Many states have adopted substantial restrictions on this latter practice, with several new or revised provisions implemented in 2009. Inquiries into existing state consumer protection provisions, and how they would apply to this “Stranger-Originated/Owned” type of annuity transaction, will certainly be an important part of this regulatory attention.
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