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Committee hears bill to adopt NAIC holding-company measures for accreditation
Summary
House Bill 2,128 would add group capital calculation and liquidity stress test requirements from the NAIC Insurance Holding Company System Regulatory Model Act, authorize confidentiality protections, and allow the commissioner to select versions of technical instructions for annual use.
The Kansas Senate Committee on Financial Institutions and Insurance heard House Bill 2,128, the House companion to Senate Bill 121, which would amend the state's insurance holding company act to adopt group capital calculation and liquidity stress testing requirements used by the National Association of Insurance Commissioners (NAIC).
The bill adds definitions and authorizes the commissioner to require an insurer to secure and maintain a deposit or bond in specified circumstances. It also requires the commissioner to maintain confidentiality for certain documents produced as part of group capital calculations and allows the commissioner to select and publish which versions of technical instructions and documents will govern in a given year.
"House Bill 2,128 is the bill that we refer to as the insurance department's accreditation bill," committee staff member Eileen told the committee. She said the measure implements technical NAIC requirements and standardizes administrative deadlines, including an instruction that the commissioner publish the chosen versions of documents in the Kansas Register by Dec. 1 each year.
Steve Carey, general counsel for the Kansas Department of Insurance, explained why state accreditation matters to insurers and the department. "If we are not accredited, then a domesticated company in Kansas is not just regulated by us, but then they would be regulated by every state that they operate in, which would obviously be very detrimental to them trying to satisfy sometimes 50 or more regulators," Carey said. "This is much more efficient of having the domesticated regulator do the bulk of the regulation. And so that's why that's important."
Carey noted the bill builds on prior work and that the department is not opposed to a previously proposed amendment (referred to in committee as the "Town amendment") clarifying that the state does not regulate self-funded plans.
No committee vote was taken on HB 2,128 during this session; the measure was presented for committee consideration and questions.
