Group Capital Calculation Working Group – September 18, 2020
When developing a group capital calculation, the Group Capital Calculation Working Group (Working Group) must consider needed changes to the National Association of Insurance Commissioners’ (NAIC) Holding Company Model Act and Model Regulation. Those revisions were the topic of this call.
Proposed changes to these two documents had previously been exposed for comment. Most of the comments received addressed the subgroup reciprocity wording in the drafts. Interestingly, the industry isn’t in agreement regarding reciprocity and seems to be equally divided on the issue. Other topics discussed included worldwide exemption, U.S. exemption, the handling of insurance holding companies that perform a group capital calculation specified by the U.S. Federal Reserve Board, and lead state commissioner discretion.
The Working Group exposed for comment revised versions of the documents, which incorporated some of the suggested language changes. The chair noted the re-exposed versions still contain reciprocity wording, but it shouldn’t be interpreted as the Working Group’s endorsement on the topic. The comment period ends October 5. The conference call ended with the chair indicating the Working Group would like to deliver revised models to the NAIC Financial Condition (E) Committee before Thanksgiving.
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