Company Confidential ©2009 Genworth Financial, Inc. All rights reserved. Market Conduct Reform: The...

Company Confidential©2009 Genworth Financial, Inc. All rights reserved.

Market Conduct Reform: The Good, The Bad, The Ugly

•ACLI Compliance and Legal Section•Annual Meeting

•July 22, 2009

07/22/2009MCAS: ACLI Compliance/Legal Section Annual Meeting

MCAS Milestones: 2002•Pilot Program Announced Market Analysis Working Group – Sept 2002

•Purpose– Uniform system of collecting market related information

– Promote uniform analysis from state to state

– Consistent measures allows companies to be compared on an equal basis in a given state

•9 Participating States

•Submission Due Date December 31, 2002

•Data Collection From 1/1/02 to 6/30/02

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MCAS Milestones: 2002 (Cont’d)Data Collected 8 Schedules

Replacements Applied For 1035 Exchanges

Full And Partial Surrenders

New Policy Loans Exceeding 25% Of Maximum Loan Value

Death Claims, Paid, Received, Denied, Resisted, Compromised

Complaints – Consumer And DOI

Direct Premium Written

Issued Policies

In Force Policies Or Certificates

Amounts Issued

Amounts In Force

Individual Cash Value Products

Group Cash Value Products

Individual Non-Cash Value Products

Group Non-Cash Value Products

Individual Fixed Annuities

Group Fixed Annuities

Individual Variable Annuities

Group Variable Annuities

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MCAS Milestones: 2003•Industry Invited To Participate In Open Dialogue – Facilitated By ACLI

•Discussions Resulted In Changes To Data Requirements And Submission Date

•Ohio Served As Data Collection Point; Then Distributed To Appropriate State

•Submission Made Under Market Conduct Protections Of Participating States

•Changes Made To Data Requirements– Reduced schedules from 8 to 5

– Deleted 2 measures/questions

– Added 1 measures/questions

– Changed 2 measures/questions

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MCAS Milestones: 2003 (Cont’d)•8 Participating States

– Submission due date April 30, 2004

– Data collection from 1/1/2003 – 12/31/2003

•ACLI Survey -- Number Of Hours Required To Respond – Requirement of programming work

– Manual data retrieval/review

– Receiving data from third parties

– Number of person hours for each step

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MCAS Milestones: 2004 – 2006•2004

– Adopted process to introduce changes to the report and addition of new states• Changes to be made by 08/01

• New states required to declare by 9/1 of year prior to which data is to be collected

– 12 participating states

– Submission date June 30, 2005

– Data collection 1/1/2004 – 12/31/2004

– No changes to data requirements•2005


– Definitions changes•2006


– Centralized call letter – December 2006

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MCAS Milestones: 2007•“Dark Cloud On The Horizon” -- Ohio Declares It Can No Longer Support Data Collection And Distribution

•3 NAIC Task Force Teams Developed To Study:– Aggregate annual statement

– Uniform process for analysis

– Process for adoption of elements

•June 2007– 22 participating states

– Certification for MCAS data adopted for 2008 submission

– Premium threshold for participation established as $50,000 aggregate for life premiums and annuity considerations – all schedules required

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MCAS Milestones: 2008•4/18/2008 – Proposal Market Regulation And Consumer Affairs (D) Committee

– Establish a separate annual financial statement exhibit for submission of MCAS data

– Set may 1st as the annual filing date

– Authorize NAIC to receive, store, analyze data and distribute results

•Industry Response– Concerns with confidentiality of data

– Concern about inconsistency of results and conclusions; need for common data dictionary

– Shift in focus from market analysis to consumer protection

•25 Participating States

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MCAS Milestones: 2009•29 Participating States

•NAIC Serves As Central Collection Point

•Task Force Created To Explore Remaining Issues: – 2 regulators

– 2 industry representatives

– 2 consumer representatives

•$50,000 Premium Threshold Applied To Either Life Or Annuity Products

– Not required to report product line that does not meet threshold

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