NU Online News Service, Aug. 26, 6:45 p.m. – MetLife Inc., New York, is backing a data-collection effort that could help state insurance regulators improve the market conduct exam process, but many property-casualty insurers are asking whether the benefits will justify the cost.

The National Association of Insurance Commissioners, Kansas City, Mo., wants to organize a large, detailed data-collection pilot project in 10 states to see if the results can help regulators make the exam process simpler and cheaper for insurers while continuing to protect consumers.

A joint property-casualty trade group is questioning the likely expense of the proposed pilot project.

The group includes the Alliance of American Insurers, Downers Grove, Ill.; the American Insurance Association, Washington; the National Association of Independent Insurers, Des Plaines, Ill.; and the National Association of Mutual Insurance Companies, Indianapolis.

Sixty-two insurers surveyed by the group estimated that answering the proposed data call would cost between $10,000 to $25,000 per company, according to Lenore Marema, a representative for the group and a vice president at the Alliance of American Insurers.

Insurers with low premium volume and insurers with high premium volume gave similar responses, Marema says.

The p-c insurers want to see regulators justify the cost to the 800 affected companies by using the results to come up with more narrowly targeted exams and taking other concrete steps to improve the exam process, Marema says.

But Ann Henstrand, a vice president of government affairs at MetLife, emphasized that MetLife wants to see the NAIC data call succeed.

MetLife receives many different requests for market conduct exam data, and the differences in the requests drive up costs, Henstrand says.

A successful effort to streamline the exam process could help MetLife save time, money and resources, Henstrand says.

Marema welcomed one development that emerged last week from an interim NAIC meeting in Chicago: the NAIC extended the amount of time affected insurers have to answer the proposed data call to 90 days, from 45 days.

Henstrand also welcomed the extension. “Very real progress was made at the meeting,” she says.

Now that the NAIC has extended the time for answering the data call to 90 days, insurers should be able to prepare the data without pulling information-technology resources from other projects, Henstrand says.

The NAIC is also helping insurers by putting spreadsheets companies would need to use on the NAIC Web site, at http://www.naic.org, and by designating a specific person at each participating insurance department as the contact on the pilot for that state, Henstrand says.

The NAIC expects life insurers to gather data for the first half of 2002. Project organizers would develop a report based on the data by December 2002.

Property-casualty insurers would gather data for the first half of 2003, then project organizers would develop a report by December 2003.