Leadership at the National Association of Insurance Commissioners is looking to 2018 with a focus on implementing the international covered agreement on reinsurance matters and working toward stability in the health insurance marketplace, according to Julie Mix McPeak, the incoming NAIC 2018 president and Tennessee's insurance commissioner.
The organization will deal with challenges from new and fast-growing social media and other data mining and modeling used by insurance underwriters, while also contending with a much older problem — long-term care insurance policies written in decades past.
Incoming NAIC 2018 President
McPeak, who progressed from NAIC president-elect to the top position for the state-driven standard-setting organization after a vote, spoke with reporters Dec. 4 in Honolulu at the annual fall meeting. She was joined by Maine Insurance Superintendent Eric Cioppa, who becomes president-elect for 2018, South Carolina Insurance Director Ray Farmer, who becomes vice president, and Hawaii's Gordon Ito. Ito bested Illinois Insurance Director Jennifer Hammer for the secretary-treasurer position in a closed membership vote Dec. 4 in the only contested leadership position. Current NAIC President Ted Nickel rolls off the top leadership when his term expires at year-end.
The Federal Insurance Office, with the U.S. Trade Representative's office, had been working with the European Union on a covered agreement applying to reinsurance supervisory matters — including reinsurance collateral, insurance group supervision and capital structures — for almost two years before the agreement was officially signed Sept. 22.
The NAIC also continues its focus on health insurance markets. Elected officials rejected the idea that they were waiting around for Congress to act on reforming or repealing the Affordable Care Act, including the individual mandate. Cioppa said the NAIC is "working very hard right now" to keep health insurance markets stable.
Leadership is also focused on the industry's use of "big data," and said the NAIC's Big Data Working Group would get more direction in the coming year. Consumer advocates at the fall meeting shared publicly and privately their frustrations that the working group was rudderless, with a chairperson still listed as to be determined. These consumer advocates repeated concerns that state regulators were not moving fast enough to get insights or access into the industry's data mining activities, internal models and use of data in underwriting or determining fraud.
Cioppa also acknowledged that the industry's closed blocks of long-term care insurance, which are generally severely under-priced, are "a significant problem," which the NAIC will be addressing more in 2018. He pointed to the LTC reserve problems at General Electric Co. as part of this problem. GE announced back in October that it would put on hold plans to upstream $3 billion in dividends from GE Capital until it evaluates the results of a full review of certain assumptions used in annual LTC claims reserve adequacy testing.
Cioppa is also co-chair of an NAIC task force charged with coordinating all aspects of the group's work on LTC insurance, including a more rigorous assessment of LTC insurers' financial solvency and of state insurance department responses on premium rate increase requests on blocks of business in order to make them more consistent and predictable.