Evolution of the U.S. Solvency System - NAIC

We have developed a detailed and uniform financial regulatory
system in the U.S.

In the 1990s we created risk-based capital requirements and
have continued to improve the formula over time, including
adding stochastic modeling and trend tests.

SAP was codified in 2001 into a comprehensive guide and has
continued to be updated & improved since.

We are placing greater emphasis on Governance through a
Model Audit Rule.

We are proposing to modernize Reinsurance & Principles-
Based Reserving

What is clear is that we have been continuously
improving U.S. insurance regulation for many
years.

What we have on our plates now is an investigation
of new ideas and an opportunity to create the
Gold Standard of Solvency Systems through the
Solvency Modernization Initiative (SMI)!

Long-term work plan – continuous evolution

The work we will do will not only be a
Gold Standard for our system, but will determine
how we respond to U.S. International Activities.
We will be looking inward, but also dialoguing outward.