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NAIC to Combine Life and Fraternal Blank | Regulatory Alert

March 1, 2019

On Friday, February 22, 2019, the NAIC Life Risk-Based Capital (E) Working Group met via conference call and exposed proposed combined life and fraternal RBC blank and instruction changes for comment. The changes would be effective for the 2019 RBC filing. The proposed materials can be found at the Working Group’s webpage as Attachment 4 of the materials from the February 22nd conference call, and are also attached. Comments should be sent electronically to Dave Fleming (dfleming@naic.org) by Close of Business Monday, March 25. The goal is to have the exposed materials adopted on Sunday, April 7 at the Life RBC WG meeting during the NAIC Spring National Meeting in Orlando.

The fraternal annual statement blank is being eliminated beginning with yearend 2019. The life and fraternal RBC formulas are nearly identical except for a few items which are not applicable to fraternals and references to the fraternal annual statement blank. A combined formula will eliminate the need to maintain two sets of instructions and blank pages along with reducing time spent on maintenance of tables, specs and validation rules.

During 2018, the Alliance worked closely with representatives of Thrivent, Knights of Columbus, WoodmenLife and several Associate Members in discussions with NAIC staff and developed a position that supported the combining of the Life and Fraternal Blanks while continuing to reflect the use of certain terminology that reinforced the uniqueness of Fraternals. It was the consensus of this group of Fraternal representatives that the word “Fraternal” remain in the title and the instructions. While the exposed proposed combined life and fraternal blanks reflect this, they also reflect specific formula changes that will occur as a result of combining the life and fraternal Blanks.

As this issue will impact fraternals, the Alliance may be expected to submit written comments by the March 25 deadline. Members should review the exposed documents and provide any written comments to Joe Annotti (jannotti@fraternalalliance.org) and/or Melanie Hinds (advcacy@fraternalalliance.org) by close of business, Monday, March 18. You are encouraged to distribute this information to others within your society in order to obtain maximum distribution.