On October 27, the National Association of Insurance
Commissioners (NAIC) Receivership Model Law Working Group (under
the direction of the NAIC's Receivership and Insolvency Task
Force) unanimously approved, for public comment, a proposed draft
of a revised Life & Health Insurance Guaranty Association Model
Act. The proposed Model Act was the result of weeks of work by a
special drafting group in an attempt to address funding for an
anticipated wave of long term care insurer insolvencies.
The proposed Model Act would expand the membership of each
state's life and health insurance guaranty association to
include HMOs (which are regulated as health care centers in
Connecticut). In addition, the proposed Model Act would broaden the
types of member insurers assessed to pay claims of insureds in long
term care insurance insolvencies. Previously, these assessments
were directed toward only long term care insurers and health
insurers, but now will be expanded to add life and annuity writers
and HMOs into the assessment pool.
The proposed Model Act is currently in the comment period before
being considered for adoption by the appropriate NAIC committees
(and ultimately the Executive Committee and Plenary) at the
NAIC's National Meeting December 2-4, 2017. If approved by the
NAIC Plenary, the proposed Model Act would then be ready for states
to adopt through legislation to help fund the growing long term
care insolvency problem.
The text of the proposed Model Act is available on the NAIC's
website (see Attachment B). At present, the
public comment period is scheduled to end on November 27. The
methods for assessment are complex and the author of this post is
available to answer questions.
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