Regulators Considers Policy Proposals Affecting Self-Insurance Marketplace

Special Communication

August 17, 2014 – The Self-Insurance Institute of America, Inc. (SIIA) yesterday participated in two NAIC Working Group meetings where policy proposals affecting the self-insurance marketplace were discussed. This communication will serve to provide re-caps of each meeting.

The primary agenda item for the ERISA (B) Working Group was the recently-released white paper, entitled Stop Loss Insurance, Self-Funding and the ACA.

The Chair, Christina Goe of Montana, called the meeting to order and outlined how industry stakeholders can provide feedback on the white paper within a 30-day public comment period commencing immediately. She noted that there will be at least one conference call in “mid-September” and possibly more after the white paper is edited. It is likely that a second draft would then be circulated with an additional comment period and at least one additional conference call. The meeting only lasted about 10 minutes.

SIIA expects to submit comments as part of its broader advocacy and communications campaign to educate policy-makers at the state and federal level about the importance of self-insured group health plans and how stop-loss insurance works. Some recent examples of the association’s efforts include:
• SIIA secured the introduction of federal legislation to prevent regulators from re-defining stop-loss insurance as health insurance based on attachment point levels;
• The Self-insurance Educational Foundation (SIEF), which is affiliated with SIIA, released and updated report on stop-loss marketplace prepared by Milliman;
• SIIA President & CEO Mike Ferguson has testified at two congressional hearings over the past 10 months on the subject of self-insurance;
• Working with its members in Connecticut, SIIA was successful in killing aggressive stop-loss insurance regulation;
• SIIA continues to spearhead a lobbying effort to pass legislation in New York to protect a segment of the self-insurance marketplace in that state, and
• SIIA continues to spearhead a lobbying effort in the District of Columbia to block harmful stop-loss legislation.
Separately The NAIC’s Financial Regulation Standards and Accreditation (F) Working Group considered a proposal to re-define a “multi-state” reinsurer, one that would affect virtually all captive insurance companies operating in multiple states. The definition has many problems including: the proposal would affect a broader range of insurance lines than intended, an unreasonably short period to come into compliance and the costs of compliance would compel many captives to move offshore.

Chairman John Huff, the Missouri Insurance Department Director, announced that the NAIC received 34 comment letters, most of which were critical of the proposal. SIIA submitted one of the letters of opposition.

After opening public comment for only those who did not already submit comments, he turned the microphone to Commissioner Joseph Torti of Rhode Island. Commissioner Torti, a proponent of the definition change, said that he did not intend to broadly affect captives, but there are legitimate concerns about guarantees without real financial collateral. This meeting also lasted only about 10 minutes.

The next step for this proposal is unclear. Before the next NAIC meeting, the committee could release a second draft of the definition with an open comment period of either 60 or 365 days. Or, all action could be deferred until the next NAIC meeting in November.

If this proposal is to advance within the NAIC, it will have to change significantly. In discussions with several regulators after the meeting regulators, SIIA confirmed that many doubt this proposal is needed and that insurance departments already have the tools to effectively regulate captives. SIIA will nonetheless continue to monitor developments and initiate advocacy efforts accordingly.

For More Information:
Please contact SIIA State Government Relations Director Adam Brackemyre at should you have any questions regarding this report or would like to request the referenced white paper and/or reinsurance definition proposal.

Additional legislative/regulatory updates will provided at SIIA’s upcoming National Conference & Expo, scheduled for October 5-7, 2014. Event details can be accessed on-line at, or by calling 800/851-7789