NAIC's "House" of Regulation to be a Focus of DC Summit, Response to Royce Due Soon

"It appears, when it suits its purposes, the NAIC fends off questions about its accountability and transparency by arguing that it is 'a private group' that 'does not have any regulatory authority,'" Royce stated in his letter.

But the NAIC's annual report's home analogy might be instructive. "Just as a thermostat regulates a home's heating and cooling system, insurance regulators recognize the importance of monitoring companies' conduct in a more uniform manner," the NAIC states in the market regulation portion of its annual report.

In the government relations section, state-based insurance regulation is seemingly compared to the foundation of a house: "When strong winds blow, the very foundation of a home is tested. No storm has challenged the strength of our regulatory framework in recent years as much as the financial crisis that peaked in the fall of 2008. While state-based insurance regulation protected the insurance markets from the worst damage, state regulators are making proactive changes to better monitor financial markets, address the insurance industry's exposure to other economic sector vulnerabilities and ensure that sound regulation will support the insurance industry in the United States and abroad going forward," the report states.

Structural upgrades to the house take the form of the Solvency Modernization Initiative (SMI) to perform "a holistic, critical self-examination of the U.S. solvency regulation framework, supplementing the ongoing maintenance of solvency rules and processes."

Other speakers will include four insurance trade group presidents, two academics, and two speakers from Ernst & Young on international regulatory harmonization.

The financial health and solvency of insurance companies is the ground below the house, "keepsakes from our travels to remind us of the adventures we had and the people we met" when one journeys abroad from the home take the form "enhanced regulatory cooperation, memoranda of understanding and technical exchanges. "

FIO Director Michael McRaith, who was slated to be the keynote speaker, will not be able to appear due to the fact that the FIO report mandated by the Dodd-Frank Act has not yet been released, the conference organizer noted. The report will be the elephant in the room if it is not addressed.

Royce appears to have been added to the agenda recently, perhaps to replace McRaith.

Other speakers, including Roy Woodall of the Financial Stability Oversight Council, where he is the only voting member with insurance expertise, will discuss issues, legislation and research affecting the insurance industry, including elements of the Dodd-Frank Wall Street Reform and Consumer Protection Act which created the FIO, the agenda says.

The summit is sponsored by Faegre Baker Daniels, with additional support from Ernst & Young.