Mr. Iuppa also spoke on the importance of the United States' engagement in global solvency initiatives.

"To meet the needs of today's global consumers, I am a firm believer that the U.S. regulatory community must continue our efforts to be actively engaged in the processes and forums that lead to greater international coordination," Mr. Iuppa said. "The NAIC and EU dialogue that began nearly eight years ago is a prime example of that commitment."

In his address, Mr. Iuppa noted the differences between Solvency II, which is a principles-based approach to insurance regulation employed by the EU, and the current risk-based capital system used by U.S. regulators since 1994.

He said that many U.S. insurance regulators now acknowledge that the current reserve methodologies do not adequately focus on the benefits, revenues and risk characteristics of insurance products being offered.

A more permanent, principles-based solution is needed, especially in the life insurance sector, where companies now offer more complex products and investments, he said.

"While the traditional system uses more prescribed formulas and assumptions, a principles-based system has a process of identifying and measuring all risks," Mr. Iuppa said.

The NAIC has created a Principles-Based Oversight Committee, he said, whose responsibilities include working toward the implementation of a principles-based system.

As this process moves forward, U.S. regulators have dual responsibility to develop a sound public policy for establishing a principles-based approach and to create the technical framework for implementation and monitoring.