Newsletter

Greetings from the Compact! With spring in full bloom, our initiatives are beginning to blossom—nurtured by thoughtful discussion, shaped by feedback, and steadily growing toward the months ahead. This issue provides a fresh look at that progress, highlighting key developments and what’s coming next.

As several of the initiatives highlighted in last month’s “planting season” approach key milestones, early June will bring a cluster of important deadlines. Multiple comment periods close June 1, Roundtable RSVPs are due June 8, and the Uniform Standards development submission process remains open through June 30. These opportunities span proposed amendments, process enhancements, and future standards priorities, offering multiple ways to engage. For full details and participation instructions, please revisit the April newsletter, available on the Compact website under Regulator Resources.

Looking ahead, the Management Committee will meet on June 2, with several key items coming into focus—including a public hearing on proposed amendments to Accidental Death Benefit standards and a new interim review operating procedure, as well as consideration of additional PSC recommendations. You’ll find a closer look at what’s on the agenda later in this issue.

The Compact is also gearing up for its next in-person Compact Roundtable on Wednesday, July 15, from 12:00–3:00 p.m. ET, held in conjunction with the NCOIL Summer Meeting. These Roundtables are known for candid, high-value discussion, and this session will build on that record with an even sharper focus on meaningful exchange and shared problem solving. We strongly encourage regulators, industry, consumer representatives, and other stakeholders, especially those already planning to attend the NCOIL meeting—to make time for this event. Space is limited, so please be sure to RSVP by June 8 via the Compact Roundtable Form.

The Compact recently hosted a Designated Representative orientation on May 20 and 21. If you were unable to attend, the session is now available on demand via NAIC Connect (regulator-only platform). The training provides a helpful overview of the role, key responsibilities, and available resources, and may be a useful refresher for both new and experienced designees. The recording is available on the Interstate Insurance Compact page.

We are grateful for the opportunity to serve our members, and we are here to provide whatever support they need.

This month, the Compact community mourns the loss of two respected leaders whose contributions helped shape both the organization and the broader insurance regulatory landscape.

Former Compact Chair and Maryland Insurance Commissioner Kathleen A. Birrane leaves behind a legacy of thoughtful leadership and forward-looking vision. During her tenure, she played a pivotal role in guiding the Compact through a period of growth and transformation, championing new opportunities for collaboration and helping to position the organization for the future. Her ability to bring people together—across states, sectors, and perspectives—strengthened the Compact in lasting ways.

The community also honors the life and service of Eric Cioppa, former Superintendent of the Maine Bureau of Insurance and a longtime contributor to the Compact. Over a distinguished career in public service, Eric was widely respected for his steady leadership, practical insight, and commitment to sound regulation. His involvement with the Compact—as an officer and advisory committee member—reflected a deep dedication to its mission and to the advancement of state-based regulation.

While their paths and roles differed, both Kathleen and Eric shared a commitment to collaboration and the continued strength of insurance regulation. Their contributions will continue to be felt in the work of the Compact and in the many colleagues they influenced along the way.

Our thoughts are with their families, friends, and colleagues during this time.

Actuarial Working Group

The Actuarial Working Group (AWG) met on May 5 and May 11 in regulator-only sessions to continue development of a draft standard addressing bonus benefits in individual life insurance, focusing on the actuarial requirements. Discussion reflected a shared goal of aligning the standard with current Compact review practices, particularly around nonforfeiture.

Key technical considerations included the treatment of charges associated with bonus benefits, with support for classifying these as administrative charges subject to nonforfeiture expense limits to prevent front-loaded costs. The group also discussed guaranteed versus non-guaranteed bonuses, emphasizing that nonforfeiture testing should remain limited to guaranteed benefits and expressing concern about incorporating discretionary elements into contract requirements.

The role of policy illustrations also received attention, particularly the inclusion of non-guaranteed bonuses and the resulting oversight considerations. While viewed as outside AWG’s actuarial scope, these issues were identified for potential discussion in other forums, including NAIC workstreams.

Additional discussion addressed endorsement-based bonuses, including potential concerns related to rebating and unfair discrimination if not uniformly available. The group agreed to flag these issues for PSC consideration.

The AWG finalized a revised draft incorporating technical edits to submit to the PSC, along with a summary of broader policy considerations.

The meeting also marked a leadership transition, as Chair Pete Weber prepares to retire effective June 1. Members recognized his longstanding contributions to the Compact and his leadership on this initiative.

The Management Committee will meet on June 2 via WebEx to continue advancing several initiatives first introduced or discussed during the Spring Joint Meeting in March. Building on that earlier discussion, this meeting represents a key transition point from initial concept and direction-setting to formal action and stakeholder input.

A central focus of the meeting will be a public hearing on proposed amendments to the Accidental Death Benefit standards, along with a proposed new operating procedure establishing an interim review process for certain interpretive issues that arise during product filing reviews. Both initiatives were introduced during the March meeting—the accidental death benefit amendments as part of ongoing Product Standards Committee (PSC) work, and the interim review process as a new concept from the Rulemaking Committee—and are now moving through the formal notice-and-comment process. Written comments were accepted through June 1, with the hearing providing an additional opportunity for stakeholder input.

The Committee will also consider PSC recommendations to expose for notice and comment proposed amendments to non-variable annuity standards, including both individual deferred paid-up and immediate contract standards. These recommendations reflect the PSC’s continued efforts to refine Uniform Standards based on regulatory experience and evolving market considerations.

In addition, the Management Committee will review draft amendments to the long-term care (LTC) rate filing standards, developed by the PSC in response to Colorado’s request raised during the March meeting. As discussed at that time, the request highlights a direct conflict between Colorado law and current Compact standards regarding the use of gender as a rating characteristic. The PSC was tasked with developing draft language for further consideration, and the Committee will now evaluate those initial recommendations as part of its ongoing deliberation.

Following the public hearing and related discussions, the Commission will consider adoption of the accidental death benefit amendments and the proposed interim review operating procedure at a future meeting. In addition, the Management Committee is expected to vote on whether to begin the rulemaking process for the PSC’s recommended annuity standard amendments, while also reviewing the draft long-term care (LTC) rate filing amendments for further discussion and direction.

Regulators with questions or who would like to discuss any of the agenda items in more detail are encouraged to reach out to their Regulatory Affairs Division (RAD) team representative. If you’re not sure who your representative is, you can find that information on the Compact’s Interstate Insurance Compact page in NAIC Connect.

Wayne Mehlman is Senior Counsel at the American Council of Life Insurers (ACLI) where his primary responsibilities relate to receivership and guaranty association issues, annuities and the Interstate Insurance Compact.    

He is lead staff to ACLI’s Receivership Committee, Annuities Committee and Interstate Compact Subcommittee. Mr. Mehlman works closely with ACLI members to develop and recommend policy on related issues, including those involving:

• State and federal legislation and regulations
• Model laws, regulations and accreditation standards of the National Association of Insurance Commissioners (NAIC)
• State guaranty association coverage and assessment issues
• Non-qualified annuities, including registered index-linked annuities (RILAs)
• Uniform product standards of the Interstate Insurance Compact
• Proposed standards and guidance of the International Association of Insurance Supervisors (IAIS) and the Financial Stability Board (FSB)

In doing so, he also coordinates with other ACLI committees, regulators, industry trade groups and state guaranty associations, as well as the National Organization of Life and Health Insurance Guaranty Associations (NOLHGA), International Association of Insurance Receivers (IAIR) and the Global Federation of Insurance Associations (GFIA).

Before joining ACLI in 2005, Mr. Mehlman worked at the International Council of Shopping Centers (ICSC), the U.S. Chamber of Commerce and in public accounting.  He earned his J.D. from Rutgers University School of Law - Camden in 1987 and his B.A. from Rutgers College in 1984.  He and his wife, Susanne, have two children and live in Rockville, Maryland.