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September 08, 2002 at 08:00 PM
NAIC Will Be Tackling Tough Issues In The Big Easy
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Regulators will be tackling high-visibility consumer issues during the fall meeting of the National Association of Insurance Commissioners this week in New Orleans.
Leading the list will be a decision by commissioners to advance or kill the Life Insurance and Annuities Suitability model act and model regulation. The models seek to establish guidelines for companies and producers for suitable recommendations of fixed life insurance and annuity contracts.
Updated guidelines for corporate-owned life insurance will also be addressed. Public concerns have been raised there is no disclosure to employees and their spouses that life insurance policies have been taken out on their lives by their employers.
The COLI working group, spearheaded by North Dakota Commissioner Jim Poolman, is addressing the disclosure issue. Discussions suggest that going into the fall meeting, there is general agreement employees should be informed if an insurance policy is being taken out on their lives. But details, including the consent of an employee, are still being reviewed.
Another consumer issue with which regulators continue to grapple is learning how insurers search for multiple policies when a policyowner dies. When the issue is examined in New Orleans, the focus will be on a survey sent to companies to determine how they conduct such a search at the request of regulators.
New York, South Carolina and Texas are among states advancing their own efforts to make sure policyholders are fairly treated.
For instance, in Texas, data from a second survey measuring small face amount policies is now being compiled, according to William Goodman, special litigation counsel with the Texas insurance department. The department, at the behest of the state legislature, is preparing a report set to be released at year-end 2002.
Market conduct and interstate compact efforts will also receive much regulator attention.
Concern over the confidentiality of data provided to states was again raised when several states including Arizona, Maryland and California said they were still studying whether confidentiality of data could be preserved. Those states did not say data provided for a pilot project could not be preserved, but rather, that further investigation was needed to ensure it could be kept confidential.
