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Regulation Issues

The Alliance staff, Board of Directors, Board committees and task forces work together in a variety of ways to identify issues on which the Alliance focuses.

PBR Small Company Exemption

The Alliance and its advocacy groups secured the enactment of the amendment to the small company exemption provision from Principles Based Reserving (PBR) regulations contained in the NAIC Standard Valuation Manual to eliminate the current 450% RBC threshold for insurers with less than $50 million in annual life insurance premium. This exemption levels the playing field for smaller fraternals since their simplified operations do not warrant the same level of reserving as larger insurers. See Page 14 of this document for specifics on this exemption.

Life – Fraternal Blanks

When the Alliance learned in 2017 that the NAIC was looking to align the annual reporting of fraternals with the reporting process of commercial insurers, the Alliance rallied its members to assess the proposal, provide feedback to the NAIC, and to share the final product with members.

Corporate Governance Annual Disclosure (CGAD)

The Alliance and its volunteer groups provided feedback on the NAIC’s proposed process to monitor the governance practices of its members through an annual reporting process. As CGAD has been adopted over the years on a state-by-state basis, the Alliance has informed its members when enacted and provided a host of workshops and resources aimed at helping members improve governance practices and report on their society’s decision-making processes to regulators.

The Model Act will become an accreditation requirement on January 1, 2020. Upon state adoption of the NAIC models, each U.S. insurer (or the insurance group in which the insurer is a member) must submit a Corporate Governance Annual Disclosure (CGAD) to its lead state or domestic regulator on an annual basis.