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Weekly news through April 8


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Weekly news through April 8

S&P Global Market Intelligenceoffers our top picks of insurance news stories and more published throughout theweek.

Risk & Regulation

TheU.S. Department of Labor releasednew that broaden the types of financialadvisers considered fiduciaries and impose new obligations designed to eliminatepotential conflicts of interest in guiding clients toward retirement.

A greatershift to robo-advisersfor average savers may follow the new fiduciary rule, an audience member expressed atthe recently held Life Insurance Conference panel dedicated to the new standard'simplications for retirement planners and the wider investment advice industry.

Standard& Poor's Ratings Services does not expect to change its ratings on U.S. life insurers as a result of the new fiduciaryrules, but sees potential ratings implications in the next couple of years dependingon how life insurers adjust to the new regulation.

Stateinsurance regulators and industry stakeholders recently gathered to discussa range of regulatoryissues at the NAIC's SpringNational Meeting.

Louisiana Insurance Commissioner James Donelon aired conflict-of-interestconcerns over the insuranceregulatory organization's searchfor a new CEO, launching a bid to banformer regulators from NAIC jobs until two years after they leave office. But theofficial proposal failed to garner any support among members of the NAIC's GovernanceReview Task Force.

The NAIC Group Calculation WorkingGroup met during the NAIC Spring National Meeting, spurring many questions and furnishing few answers. Insuranceindustry representatives, as well as fellow regulators, queried the working group,with some seeking assurances that  group capitalcalculation for U.S. insurance groups would not later become a model law but insteadserve as a tool for state regulators.

The NAICis seeking to fast-track a cybersecuritymodel law, but the insurance industry is pushing back on the timing and the contentof the proposal.

Legislationneeded to enable principle-based reserving,or PBR, methods in the life insurance industry had been enacted by 42 states representingmore than 75% of industry premiums by the end of March. But neither the NAIC northe life insurance industry is sounding the trumpet in triumph after ostensiblyreaching the minimum threshold to implement PBR at the beginning of 2017.

Potentialreforms for the AffordableCare Act's risk adjustment program was on the agenda during a recent private meetingof state insurance regulators. The NAIC's newCo-Op Solvency and Receivership Subgroup would focus on whether the states havethe authority to make changes to a program largely run by the federal government.

The Delaware Insurance Department will participate in thecoalition of states collectinginformation on insurers' terrorism risk exposure. State insurance departments areworking to finalize a collection template, with plans to start the mandatory submissionprocess later in 2016.

Life and health

Aspokesperson formally announced that the Treasury Department will a court's decision to rescind the nonbank systemically important financialinstitution designation of MetLifeInc.

TreasurySecretary Jacob Lew claimedthat the court's decision left one of the most interconnected financial companiesin the world subject to even less oversight than it had prior to the financial crisis.

ThePennsylvania Insurance Department approvedAetna Inc.'s pending acquisitionof Humana Medical Plan of PennsylvaniaInc. The deal is part of Aetna's bid to acquire HumanaInc.

was orderedinto liquidation, underwhich Hawaii Insurance Commissioner Gordon Ito was authorized to take control ofthe company's assets as the liquidator and assume the powers of its directors andofficers.


isexpected to find a bidderthat will acquire 100% of United GuarantyCorp., as AIG has obtained several offers for the unit earlier in 2016,The Insurance Insider reported.

As partof AIG's cost-cuttingprogram, employees ofthe company's U.K. operations were notified of a plan for job cuts that may include 125 positions in the country,Bloomberg News reported.

Insurers and reinsurers issued about $2 billion in catastrophebonds in the first quarter, an increaseof 35% compared to the year-ago period, according to Property Claim Services' quarterlycatastrophe bond report.

Totaleconomic losses sustainedto property, infrastructure and agriculture from the convective storm and flooddamage across the U.S. during the month of March were anticipated to approach $3.5billion, according to the latest monthly Global Catastrophe Recap report from AonBenfield's Impact Forecasting.

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