NAIC Executive Committee Action
June 22, 1998

The Executive Committee at its meeting in Boston on June 22 took this action:

1.  Referred the model regulatory act back to the A committee with instructions to address certain issues including calculation of required reserves. I asked her if the investment of gift annuity reserves could also be reconsidered by the A committee, and she said that it could.

2.  Instructed the A Committee to draft a streamlined regulatory act that could be presented as an alternative to more full-blown regulation. (We have been referring to this as a "model exemption statute," but, as I noted earlier, Ms. Vaughan and her colleagues are not comfortable with the word "exemption," and they prefer that it be called a "simplified" or "streamlined" regulatory act.) We previously submitted to her the draft of such an act, but the one eventually adopted by the A Committee could be somewhat more restrictive than what we submitted.

Here is the process that will be followed:  Ms. Vaughan will reconstitute the Annuities Working Group and appoint a new chair to replace Jerry Fickes, who is retiring this summer. That group will consider these two items and present their drafts and recommendations to the A Committee. Then the A Committee will take action and submit their recommendations once again to the NAIC Executive Committee. Although the Commissioners meet quarterly, it is unlikely that this matter will be ready for consideration by the Executive Committee before March of next year.

In the meantime we can continue to be part of the process and make our views known. Ms. Vaughan will inform me when a new chair is appointed to the Annuities Working Group. We can then communicate with that person, and subsequently with Ms. Vaughan.

It is very good news that the model regulatory act was not adopted and circulated by itself to the various states, for that could have stimulated increased state regulations. It is also very good news that the A Committee has been instructed to develop a model act for simplified regulation such as we now have in many states.

Thanks to all of you who contacted Ms. Vaughan and other commissioners. You were heard, and you have made a difference. From the beginning, the Annuities Working Group under Jerry Fickes' leadership, and then Ms. Vaughan, have been willing to listen to our concerns and work with us. I suggest that you now write a letter to her expressing appreciation for her cooperation with the charitable community. Her address is: