1. SEMINAR NAIC/ASSAL/SVS REGULATION & SUPERVISION OF MARKET CONDUCT © 2014 National Association of Insurance Commissioners NAIC Standard Setting

2. THE ROLE OF THE NAIC  Governed by chief insurance regulators  Standard setting and support organization  State insurance regulators establish standards  State insurance regulators conduct peer review  State insurance regulators coordinate oversight 2

3. NAIC MEMBER WORK PRODUCTS  Model Acts  Guidelines  Handbooks  Whitepapers  Model Bulletins 3

4. UNFAIR TRADE PRACTICES MODEL ACT  Adopted in 1947  Sets forth sixteen defined unfair trade practices  Two key prohibitions: misrepresentation and unfair discrimination  Standard of conscious disregard or general business practice  Penalties for violations 4

5. UNFAIR CLAIMS SETTLEMENT PRACTICES ACT  Sets forth standards for the investigation of claims  Misrepresenting material facts or policy provisions relating to coverage  Failing to make a good faith effort to pay claims with clear liability  Trying to make unreasonably low claim settlements  Failing to approve or deny coverage within a reasonable time after receiving a proof-of-loss statement  Standard of conscious disregard or general business practice 5

6. IMPROPER TERMINATION PRACTICES MODEL ACT  Sets forth standards for the termination of policies  Prohibition on unfair discrimination  Recognizes insurer’s right to rescind  Standards for notices of cancellation and non-renewals  Sets forth permitted reasons for cancellations and non-renewals  Sets forth standards for consumer appeal 6

7. SUITABILITY IN ANNUITY TRANSACTIONS MODEL REGULATION  Producer must complete training on annuities  Insurer must provide product-specific training  Producer or insurer must obtain “suitability” information  Insurer must have procedures to review annuity recommendations 7

8. QUESTIONS/COMMENTS 8