NU Online News Service, May 21, 12:43 p.m. – The National Association of Insurance Commissioners, Kansas City, Mo., has publicly rolled out a draft for an interstate product filing compact that it says will remove the need for insurers to seek an optional federal charter.
Some insurers are studying development of an optional federal charter program because of the expense and delays involved with filing in individual states. Banks and mutual funds face no such state-by-state filing requirements, says NAIC President Terri Vaughan, the Iowa commissioner.
If the compact addresses insurers’ concerns about the expense and the delays, it will take a reason for pursuing a federal charter off the table, Vaughan says.
Vaughan adds that she does not believe that congressional approval will be needed to advance the compact, because the McCarran Ferguson Act delegates insurance authority to the states.
The May 14 compact draft includes life insurance, fixed and variable annuities and disability income products.
The draft calls for the creation of a commission in which each state would have one representative and one vote and a managing body of 12 states with representatives from the six largest states, according to Vaughan.
States could withdraw from the compact and choose whether or not to participate in a line of business, she explained.
Long-term care insurance is not included in the initial product list because LTC insurance is currently delivered in different ways in different states, Vaughan says.
But, “in general, we feel that eventually it will make sense” to include LTC insurance, Vaughan says.
The NAIC will hear feedback from insurers Thursday, and again next month during the NAIC summer meeting.
NAIC has sought the input of both the National Conference of Insurance Legislators, Albany, N.Y. and the National Conference of State Legislatures, Denver. NCOIL has expressed initial support for the document.