Greetings from Austin, TX and the TDI Compliance Conference

Posted on June 23, 2008 by Cailie Currin

It is hot here in Austin for a NY girl! We are about half-way through and the Texas Department of Insurance Life, Health & Licensing Compliance Conference has been a good one so far, and well worth the trip.   This morning I attended a session on Advertising Requirements and there was a very good discussion of new regulations and what some of those changes will mean in practice.  I found the website discussion particularly helpful because it can be difficult to take regulations drafted for paper ads to the electronic medium.  In addition, it that advertising session, I got to go back to my roots in a new and sure-to-be-a-hit "game show":  "Think like a Regulator!"

The TDI has a lot of staff here and that is very nice to see --they have been very responsive and willing to answer any and all questions posed to them.  The sessions on various product and filing issues have also been very informative and I will head back to the office (and the cooler temperatures!) with some good tips to help TX filings go more smoothly.  The conference concludes tomorrow with a panel discussion and the opportunity to submit questions to the regulators who are here, so if any of you have a question that you would like to have asked, drop me an e-mail and I'd be happy to do my best to get an answer for you! 

 

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NY OGC Issues Opinion on Insurable Interest

Posted on June 17, 2008 by Cailie Currin

On June 16, 2008, the NYSID published on its website an OGC opinion (080502)  dealing with insurable interest under section 3205(b)(3).  The context is a life insurance policy purchased by and for the benefit of a charity in order to advance an individual's goal of using a self-directed IRA to provide funding to a charity without adverse tax consequences.

The facts are very specific and the opinion quite fact-dependent, and so on first review it might appear to be limited in its applicability.  However, what I found to be the most interesting part was towards the end where the opinion compares this determination that there is an insurable interest with an earlier OGC opinion. That was an arrangement to raise funds through a securitization arrangement and to use the proceeds to purchase life policies and annuity contracts on a pool of donors.  There, section 3205(b)(3) was determined not to be satisfied because the transaction appeared to provide more benefit to third party investors than to the charity. 

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NY posts new SERFF guidelines

Posted on June 4, 2008 by Cailie Currin

The NYSID has posted new SERFF guidelines with two big changes:  Cover letters are no longer to be used in SERFF and in a change to the rules on Variable Material, the funds for variable products are to be listed separately in a "List of Funds." 

While it is something to get used to, the change regarding cover letters is pretty straightforward.  The guidance explains that the information that used to appear in a cover letter should be included in the filing description and that there should be no reference to a cover letter in other places. 

The changes for variable funds is bigger and will take some thinking through for all.  The guidance states:  "The Life Bureau now requires that the memorandum of variable material that lists the available variable funds be submitted separately from the memorandum of variable material for all other variations of the forms."  (Emphasis added).  

Basically, the idea seems to be that having a separate List of Funds (LOF), which can be used for multiple products rather than being limited to one, will be easier to get approved quickly and will improve the process.   Several companies that I have talked to about this have indicated that they will not go to a single LOF for all their products due to the way they are organized on a corporate level - e.g. different products are handled by different areas of the company, sometimes with little direct communication about things like fund changes.  But to the extent that multiple products can be covered by one LOF, and only that LOF will need to be re-filed for a fund change, it is likely that this change will reduce the number of filings for some companies.  The guidance offers 3 approaches for how the new LOFs can be incorporated into a SERFF filing:  Each has its pros and cons, so we will all have to figure out what works best based on our own filing needs and practices. 

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