Coordinated Oversight

Coordination among State Insurance Regulators

- Financial statement disclosure of affiliated activities

(NAIC uniform format and electronic data capture)

Holding Company Organization Chart; material affiliated transactions

Investments in holding company entities

- Coordinated Analysis and Monitoring

Domiciliary states perform holding company analysis and coordinate with
other states as needed

- Coordinated Examination Option

Lead state(s) run the exam; other states rely upon this work
and/or participate

NAIC Exam Tracking Tool posts coordinated exam schedule and staff
and NAIC server hosts the online examination

Independent Function of Financial Analysis Working Group (FAWG):

Entity level analysis for “Nationally Significant Insurers”; advice to states

Group level analysis for large holding company systems

Analysis of events/situations that will materially impact the industry

Financial Statement Disclosure Notes:
Contains the Holding Company Org Chart (Schedule Y, Part 1); captures the material intercompany transactions (Schedule Y, Part 2)
All investment schedules have affiliated investment sections, as do the notes to financial statements;
The NAIC blank includes significant disclosure of affiliated transactions since those have historically been a common cause of solvency stress for regulated insurers.

Coordinated Examination Option:
Say “Option” because it is not a requirement or a given that a coordinated exam will be called.

Independent Function of FAWG:
Stress that this group is a peer review for the states’ analysis work; staffed only by experienced financial analysts
FAWG provides advice and recommendations to the states in performing their solvency oversight
If questioned about the Group Analysis, it is limited by what information we can get from the public disclosures or from other regulators
Example of Events that Materially Impact the Industry: subprime mortgage exposure review by FAWG.