At its Summer National Meeting in Seattle, the National Association of Insurance Commissioners was not shying away from some of the thornier legislative issues confronting the industry.

NAIC’s newly created retained asset accounts (RAA) working group held a meeting to review the use of RAAs by insurance companies.  RAAs have come under scrutiny after complaints by survivors of slain service members about the low interest rates earned by their checkbook accounts received widespread media attention.

The working group is studying whether appropriate consumer protections are in place. “We know there have been relatively few consumer complaints about RAAs, but it is our desire to make sure consumers have as many choices as possible and that all payment term options are easy to understand,” said Roger Sevigny, co-chair of the working group and New Hampshire Insurance Commissioner.

The changing nature of solvency requirements was addressed by NAIC’s solvency modernization initiative (SMI) task force. The group released an updated SMI Roadmap that tracks the progress of the various NAIC working groups charged with solvency and financial regulatory concerns.

"This new version of the roadmap builds on the task force's considerable research on solvency structures from all over the world," said Arizona Director of Insurance Christina Urias, who chairs the SMI task force. "The roadmap now includes both short-term and long-term plans for putting this knowledge to use."

Elsewhere, NAIC looked into an issue that came to prominence during the health care reform debate— medical loss ratio. NAIC’s executive committee/plenary overwhelmingly approved final implementation of the Medical Loss Ratio (MLR) Blanks Proposal.

Blanks are the actual forms submitted by insurance companies to report financial information to state regulators. Under a provision of the Patient Protection and Affordable Care Act (PPACA), regulators will then review this data to calculate MLR and any rebate required under the new federal law.

Lastly, the plenary agreed to develop a model law for the regulation of credit-scoring vendors. The issue of credit scoring has been contested hotly at the state level. Property/casualty insurers claim credit scoring is an invaluable underwriting tool and are battling consumer advocates who deem the practice discriminatory. Illinois insurance Director Michael McRaith, chairman of the NAIC's property/casualty committee said the new model law would establish regulatory framework for vendors.



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