Insurance Regulation in Uncharted Water

The 2009 annual Career Development Seminar (CDS)—Insurance Regulation in Uncharted Water—was held August 9-11, 2009, in the Inner Harbor of Baltimore Maryland. Thanks to the dedication and hard work of the 2009 CDS crew, the 2009 CDS was a very successful voyage.

As in years past, the CDS kicked off on the evening of Sunday, August 9, 2009, with an opportunity to socialize and network with colleagues during a welcome reception.

Monday morning, the CDS began by recognizing those individuals that have met the rigorous requirements of the Society’s profession designations, the AIE and CIE. The next wave of MCM designees where also recognized.

Immediately followed the conferment ceremony was a panel discussion on health insurance moderated by Maryland Insurance Commissioner, Ralph Tyler and featuring U.S. Senator Benjamin L. Cardin (D-Maryland) and Beth Sammis. During the discussion, Senator Cardin provided an update on the status of current health insurance reform initiatives, what federal policymakers have learned, and how they are trying to design practical, sustainable reforms. Ms. Sammis provided an overview of recent reforms enacted in Maryland and what role state policymakers/regulators may have in the future.

During the Monday luncheon session, NAIC President Roger A. Sevigny, New Hampshire Commissioner of Insurance provided the keynote address. In addition, the Al Greer Achievement Award and the Schrader-Nelson Publications Award were presented.

In addition to the general and luncheon sessions, the CDS featured a series of concurrent breakout sessions organized into eight different areas of interest and three closing sessions. Scroll down to see all the sessions.

Awards

Al Greer Award
The Al Greer Award is presented annually to an insurance regulator and IRES member who not only embodies the dedication, knowledge and tenacity of a professional regulator, but who exceeds those standards. The 2009 All Greer Award recipient is Luther Ellis of the Department of Insurance, Securities and Banking in the District of Columbia.

A veteran of more than 40 years in both insurance regulation and industry, Mr. Ellis has served his department as the Assistant Deputy Superintendent of Insurance, the lead Insurance Examiner for Property and Casualty Form Filings, and as the Assistant Director for the Department’s Consumer and Professional Services Division. He is currently the Deputy Associate Commissioner for Insurance. Mr. Ellis has served on numerous NAIC committees and sub-committees, has received awards for effectively implementing SBS systems in his jurisdiction, and has been a willing and active volunteer within IRES. Beyond all of his professional skills and leadership talents, the thing that some of his peers valued most about him is his sincerity, loyalty, passion for life and keen sense of humor.

Schrader-Nelson Publications Award
The Schrader-Nelson Publications Award is presented annual to the author of the best article in the Society’s newsletter, The Regulator®. The recipient of this year’s Schrader-Nelson Publications Award is Lauren E. Willis for her article entitled “Financial Literacy Education: The Illusion of Regulation” which appeared in the November 2008 issue of The Regulator®.

President’s Award
The President’s Award is presented annually to an individual that has demonstrated an extraordinary commitment to IRES. The 2009 Presidents Award winner is Weldon Hazlewood. Over the years, Mr. Hazlewood has served on numerous IRES Committees. He served on the Board of Directors for 11 years and as the IRES Treasurer for three.

Sessions

General Session

The Tuesday morning general session featured comedienne Karen Mills. The Tuesday luncheon featured the presentation of this year’s Presidents Award along with remarks by outgoing President LeDuc and by incoming President Dennis Shoop.

Consumer Services Section

• Complaint Analysis
  A discussion of what happens after a complaint is received by a regulator, what happens next, and what is done to resolve it.
• NAIC initiatives and tools: I-Site, MyNAIC, SERFF and more
  An overview of tools available to industry and regulators, and how they can be used to maximize benefits, including a summary of the current initiatives being addressed by NAIC that will impact industry and regulators.
• Effectively Managing Catastrophe Recovery Complaint Handling
  A discussion of the role of Consumer Complaint and Consumer Advocacy divisions within a state insurance department.
• Senior Health Products: A Changing World
  A look at how the senior health market has evolved and the impact on industry and regulators.

Enforcement & Compliance Section

• If It Looks Like Fraud, Smells Like Fraud…
  A panel of fraud specialists discussed all degrees of fraudulent activities.
• Compliance Reporting Forms: To Report or Not To Report – That is the question.
  Regulatory and industry experts discussed state compliance reporting, such as financial, insurance products, anti-fraud, and more.
• Proactive Tools to Ensure Solid Producer Information: “Watch Your Step”
  A discussion of a proactive approach through coordinated efforts between market analysis examiners and producer licensing staff.
• Insurance Products: As the World Turns
  Panel discussion of how insurance products have evolved, including a regulatory and insurance industry view of life & health and property & casualty insurance products.

Financial Section

• Risk Focused Examinations
  A discussion of the implementation and accreditation issues concerning the new surveillance approach to financial examinations.
• TeamMate/NAIC Team Stores
  A discussion of the use of the TeamMate software program in the Risk Focused financial examination process, including recent improvements made to TeamRisk and a discussion of the NAIC Team Store on exams.
• Taking the Mystery Out of Sampling on Examinations
  Reviewed different sampling methods, including the revisions to sampling guidance in the examiners financial condition handbook.
• Solvency Modernization Initiative: What is the NAIC up to now?
  A discussion of the NAIC’s “Solvency Modernization Initiative” and the 5 key areas of improvement: Capital requirements, Reinsurance, Group supervision, International accounting, and Insurance valuation issues, including a discussion on the issues underlying International Financial Reporting Standards (IFRS) and how they differ from Generally Accepted Accounting Standards (GAAP) and Statutory Accounting Principles (SAP).

Information Technology

• Technology and the Present-Day Exam
  An overview of how technology is being used by some examiners in the market conduct examination process.
• TeamMate, Part 1
  An entry level demonstration of TeamMate, including various functions of the program, the role of a preparer versus a reviewer, and an assortment of tips.
• TeamMate, Part 2
  A more in-depth review of TeamMate and its many uses during the examination and analysis process, including information on typical problems and solutions.
• Technology Recap and Demonstration: Hands On!
  Provided an opportunity for attendees to gain some hands-on experience with the software

Life & Health Section

• Nuts & Bolts of the Life Insurance “Compact”
  A discussion of the Interstate Insurance Product Regulation Commission (IIPRC) including where it came from, how it works, how it revolutionized how insurance products are approved and where it’s going.
• Can Annuity Suitability be Guaranteed?
  An open discussion on how to achieve annuity suitability in the marketplace, the NAIC Model Law and Annuity disclosures, and the product and suitability standard “Red Flags” needed to ensure that products are marketed properly.
• Insurance Contract Rescissions vs. Post Claims Underwriting
  Explored the issue of insurance rescissions and discussed whether it is a legal practice or just a form of post-claims underwriting and the legal initiatives being developed.
• The Basics of Long Term Care Insurance
  A basic overview of long term care insurance, including the common policy provisions and information on how to examine the typical long-term care claim.

Market Regulation Section

• Regulating E-Commerce
  A discussion of the legal and regulatory benefits and challenges of the electronic insurance process.
• Market Regulation 101
  An entry-level presentation on Market Regulation including the merits, the tools, the best practices, and where does uniformity fit in.
• Market Analysis 5 Years Later
  A discussion of market analysis in the beginning, how it has evolved over the last 5 years, and what remains on The Regulator®-industry wish list?
• Market Regulation & Specialty Lines
  Information on how to conduct analysis and examinations on a specialty line including viatical providers, surplus lines brokers, or title companies.

Property & Casualty Section

• Innovations in the Property & Casualty Industry
  A discussion on the recent product innovations such as coverage for identify theft and the introduction of “green” coverage to property insurance products.
• Does an Optional Federal Charter Make Sense for Property-Casualty Insurers?
  A panel discussion on the possibility of Congress adopting an Optional Federal Charter that applies to property-casualty insurers, insureds, and regulators.
• The National Flood Insurance Program: Can it be Fixed?
  This session discussed the challenges the National Flood Insurance Program faces, including alternatives to NFIP and information on how other nations cover the flood peril.
• Reinsurance: How it Works; How it Affects Availability
  A session on reinsurance basics, including its importance for insurers, how the market functions, and how reinsurance affects the availability of primary coverage such as homeowners insurance in coastal areas.

Regulatory Compliance Section

• Running an Efficient, Effective Market Conduct Examination (an industry panel)
  Industry experts provided the tips and techniques they utilize to ensure that a Market Conduct examination is run in a cost effective manner while still allowing state regulators to do their job.
• The Continuum of Regulatory Options: Does it Work? Is it Really Being Followed by Regulators?
  A discussion regarding the modernization of insurance regulation and the new era of Market Analysis, including whether regulators use the Continuum of Regulator options or jump right to a targeted examination when market analysis indicates a company is an outlier.
• Roundtable Discussion of Industry and Regulatory Issues
  An open forum where regulators, NAIC staff and industry representative provided their perspectives on a variety of subjects such as market regulation accreditation, the market conduct annual statement and other questions and concerns.
• How Market Analysis Has Changed Company Compliance
  A discussion of what the industry is actually experiencing with Market Analysis regulation and how it differs from traditional market conduct exams.

Closing Sessions

• Hot Issues in Life & Health Market Regulation
  Presented perspectives from all sides on issues such as suitability standards and monitoring; prompt pay; senior sales; centralized data collection; collaborative actions, and more.
• Wall Street Crisis and Insurers
  Discussed the impact of the Wall Street crisis on insurers, including topics such as the AIG bail out, the recent Bernard Madoff securities fraud scandal, and other relevant developments.
• Fraud Today: The Latest Regulatory Tools
  A discussion of how fraud no longer affects only producer licensing and insurance sales practices, the challenges it poses to market regulators and everyone involved in consumer protection, and a discussion of the new weapons being used against this persistent enemy.

CDS Sponsors

IRES would like to thank the following firms for their generous support of IRES and the 2009 CDS:

• Eide Bailly
• RSM McGladrey
• Sonnenschein, Nath & Rosenthal, LLP
• INS Regulatory Insurance Services, Inc.
• Examination Resources