The NAIC Financial Regulation Standards and Accreditation Committee recently approved revisions that will impact some captives reinsuring XXX/AXXX reserves, variable annuities and long-term care products. The approval comes after more than a year of consideration about whether reinsurers organized as captives and reinsurance business written in other states should be subject to the NAIC’s accreditation standards for multistate reinsurers. The approval was met with skepticism from the industry, with the American Council of Life Insurers (“ACLI”) voicing opposition to the changes as premature. The ACLI suggested that the NAIC’s new variable annuities working group should be allowed to perform additional work before the Financial Regulation Standards and Accreditation committee takes further action. Additionally, the ACLI expressed concern that the draft “safe harbor” provisions are insufficient for long-term captives and variable annuities. The next step is for the Committee to deal with issues regarding grandfathering and an effective date, which is expected to occur at the NAIC summer meeting in Chicago in August.
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