1. Federal Insurance Regulation November 13, 2007 CAS Annual Meeting, Chicago, Illinois

2. S. 40 / H.R. 3200 Provides option for P&C and Life insurers to obtain a federal charter and be federally regulated Provides option for P&C and Life insurers to obtain a federal charter and be federally regulated Federal option to be available for agents and brokers as well, but not for Health insurers Federal option to be available for agents and brokers as well, but not for Health insurers Federally chartered insurers can choose to switch back to a state license Federally chartered insurers can choose to switch back to a state license

3. S. 40 / H.R. 3200 Establishes Office of National Insurance in the Treasury Department Establishes Office of National Insurance in the Treasury Department Commissioner of National Insurance appointed by the President for a five-year term Commissioner of National Insurance appointed by the President for a five-year term Office of National Insurance will have six branch offices Office of National Insurance will have six branch offices Office of National Insurance funded by National Insurers Office of National Insurance funded by National Insurers

4. S. 40 / H.R. 3200 P&C insurers not subject to rate or price regulation; forms must be available for inspection P&C insurers not subject to rate or price regulation; forms must be available for inspection Lack of rate and price regulation means McCarran-Ferguson limited anti-trust exemption no longer applies Lack of rate and price regulation means McCarran-Ferguson limited anti-trust exemption no longer applies

5. S. 40 / H.R. 3200 Legislation covers many aspects of the business of insurance, including financial regulation, market conduct, unfair trade practices, receivership and liquidation, and mergers and acquisitions Legislation covers many aspects of the business of insurance, including financial regulation, market conduct, unfair trade practices, receivership and liquidation, and mergers and acquisitions In many areas, the Commission is directed to start with NAIC model laws and regulations In many areas, the Commission is directed to start with NAIC model laws and regulations

6. S. 40 / H.R. 3200 National insurers still pay state premium taxes National insurers still pay state premium taxes They participate in state guaranty funds as long as they meet “safety and soundness” standards They participate in state guaranty funds as long as they meet “safety and soundness” standards They must follow state “compulsory coverage” laws and must participate in state residual market mechanisms, but the state cannot prescribe the prices charged They must follow state “compulsory coverage” laws and must participate in state residual market mechanisms, but the state cannot prescribe the prices charged They must participate in state mandated statistical or advisory organizations They must participate in state mandated statistical or advisory organizations

7. S. 40 / H.R. 3200 Insurer choosing to remain state-licensed continues its rights and obligations in the state system as if the federal system did not exist Insurer choosing to remain state-licensed continues its rights and obligations in the state system as if the federal system did not exist The bill does federalize certain aspects of surplus lines insurance to eliminate multi-state premium tax issues The bill does federalize certain aspects of surplus lines insurance to eliminate multi-state premium tax issues

8. Federal Insurance Regulation Neil Alldredge, Vice President-State & Regulatory Affairs, NAMIC Neil Alldredge, Vice President-State & Regulatory Affairs, NAMIC Deirdre Manna, Vice President, Industry & Regulatory Affairs, PCI Deirdre Manna, Vice President, Industry & Regulatory Affairs, PCI J. Kevin A. McKechnie, Executive Director, ABIA J. Kevin A. McKechnie, Executive Director, ABIA Michael McRaith, Director, Illinois Division of Insurance Michael McRaith, Director, Illinois Division of Insurance

9. Casualty Actuarial Society 1100 North Glebe Road, Suite 600 Arlington, Virginia 22201 www.casact.org