Transcript National Association of Insurance Commissioners NAIC: How We Use Insurer Compliant Data Trish Schoettger NAIC Sr.

National Association of
Insurance Commissioners
NAIC: How We Use Insurer Compliant Data
Trish Schoettger
NAIC Sr. Manager
NAIC: How We Use Insurer Compliant Data
NAIC – History & Background
State Insurance Regulatory Objectives
How NAIC Supports the States
Collecting Data
NAIC: How We Use Insurer Compliant Data
Why NAIC Collects the Data
How States Use the Data
Keeping the Data Confidential
How You Can Participate in the Process
NAIC History & Background
A Tradition of Consumer Protection –
• Formed in 1871
• Voluntary organization of chief insurance regulatory
officials from the 50 states, District of Columbia and
five U.S. territories
• Created to address the need to coordinate regulation
of multi state insurers.
• Assists the state’s in their primary objective –
protecting consumers and ensuring the safety and
soundness of insurance companies operating in the
United States.
State Insurance Regulatory Objectives
License/
Approve
Company Certificate
of Authority
Producer/Agent
Licensing
Rate & Form Product
Approval
Financial
Solvency
Financial Analysis & Exams
Statutory Accounting &
Reporting
Receivership – Rehab or
Liquidation
State Accreditation Program
Market
Regulation/
Consumer
Affairs
Market Conduct
Analysis
Consumer Assistance
& Education
Fraud Investigation &
Enforcement
Government
Affairs
Coordinate w/Fed Reg
State Legislators – NCSL,
NCOIL
International Relations IAIS
How NAIC Supports the States
• Membership Services
– Education & Training
– Meeting Planning
• Financial Regulatory Services
• Securities Valuation
• Market Regulatory Services
• Legal/Model Laws
• Research/Library Services
• Information Systems
• Insurance Products and Services
• Government Relations
www.naic.org
How NAIC Supports the States
• Membership Services
– Education & Training
– Meeting Planning
• Financial Regulatory Services
• Securities Valuation
• Market Regulatory Services
• Legal/Model Laws
• Research/Library Services
• Information Systems
• Insurance Products and Services
• Government Relations
www.naic.org
Why NAIC Collects Data
1980’s – Regulator Goal to Improve Financial
Solvency Surveillance of all Insurance
Companies
– Simplify Compliance for Insurance Companies
– Modernize the Financial Reporting process by
Collecting Data Electronically
– Reduce Cost of Regulatory Compliance for
Companies
– Provide Regulators in every State, Easy Access to
Timely, Accurate Insurance Company Financial
Data
Why NAIC Collects Data
FDR: Financial Data Repository
– Simplify compliance for insurance companies
• Adopted one uniform company filing specification
standard
– Modernize the financial reporting process
• NAIC provides the secure network infrastructure for
companies to file electronically via the Internet
– Reduce Cost of Regulatory Compliance
• Company can prepare and file their financial statement
once, and comply with statutory filing requirements in all
56 jurisdictions
Why NAIC Collects Data
FDR: Financial Data Repository
• Provide Regulators in every State, Easy Access to Timely,
Accurate Insurance Company Financial Data
– Collect & Publish in 24 hours –
• company filing of 57,500 data elements loaded and data validated
against 16,638 crosschecks within 24 hrs.
– Worlds Largest Insurance Database –
• 5,000+ company filings aggregated, independently reviewed and
supporting calculations added (i.e., RBC, IRIS Ratios) – 280 gig data,
– Immediate, On-line Access for 12,000+ Regulators –
• all State Insurance Departments, regardless of size, staff experience,
or budget can begin monitoring insurance company financial solvency
• Formats – PDF, XML, Excel, HTML
• Tools – Scoring, Profiles, Exam Prep
– Recent study estimated cost $3 - $13 million, per
state, to replicate FDR
Why NAIC Collects Data
Simplify
Modernize
•Uniform Standard •Make Electronic
•Streamline
Reduce Costs
•Submit once,
comply all states
•Build once, used
by all states
Collecting Data
License
Approve
Financial
Solvency
Market
Regulation
SPLD Producer
Licensing
FDR –
Financial Data
Repository
CDS –
Complaint
Database
UCAA Company
Licensing
AVS, ISIS Securities
Valuation
RIRS –
Regulatory
Actions
SERFF – Rate
& Form Product
Filing
GRID – Global
Receivership
Info
MAP – Market
Analysis Profile
Consumer
Affairs
CIS –
Consumer
Information
Source
OFRS – Online
Fraud Reporting
System
How States Use the Data
• Make Company Licensing Decisions
• Make Producer/Agent Licensing Decisions
• Make Rate & Form Approval Decisions
• Conduct Company Solvency Surveillance
• Prepare for Market/Financial Examinations
• Evaluate Insurance Company Investment Portfolio
• Track Company Receiverships
• Track Trends in Consumer Complaints
• Monitor Marketplace, Conduct Investigations
Keeping the Data Confidential
• Legal
– Maintain Confidentiality Agreements with States
• Information Technology Infrastructure
– Maintain $6 million data center and network
– Provide a Private Frame-Relay
Telecommunications Network with the States
– Follow Industry Security Standards and
Procedures
• Maintain Adequate Firewalls
• Encrypt Confidential Data
• Conduct System Security Design Reviews
How You Can Participate in the Process
New Database Process
NAIC
Committee
Open
Meetings
Identifies regulatory need
Implement
Database
NAIC
Database
Policy and database developed
during open meetings
H
Committee
Review
NAIC
Budget
Proposal vetted thru
budget process, (includes
public budget hearing)
Reviewed by Information
Resources Mgmt (H) Cmte to
ensure alignment with overall
regulatory strategic plan