Interstate Compact Vote Due Soon, But Major Questions Persist
Just two weeks before regulators vote on what they say is the answer to a need for a single point of product filing, insurers and consumer representatives say they still have questions about the interstate compact project.
During the fall meeting of the National Association of Insurance Commissioners here, major points–including the right of a state to opt out of compact product standards, the quality of standards chosen for long term care products and the role of consumer advocates–were raised. This was despite Michigan Insurance Commissioner Frank Fitzgeralds assertion that the project is coming down to “the end game” with fairly few changes likely. Fitzgerald heads up the interstate compact working group.
The issue of regulatory opt-outs–such as the right of a state to opt out of following compact standards for long term care insurance products and establish its own standards–was a concern voiced by Patricia Parachini, a representative of the American Council of Life Insurers, Washington. Although she noted ACLIs support for the project, Parachini says ACLI wants LTCI to be uniformly available in every state and an opt-out provision could “dampen” enthusiasm for the compact.
The need for stronger opt-out requirements was also raised by William Anderson, a representative of the National Association of Insurance and Financial Advisors, Falls Church, Va. Anderson told regulators that stronger reasons are needed for a state to opt out of requirements of the compact. Eliminating the opt-out would be a better option, according to Anderson.
However, he noted the political reality of trying to get states to sign on to the compact. Still, he continued, such opt-outs would make it more difficult for uniformity to be achieved.
Front-end opt-outs for LTCI were also a concern raised by Ann Henstrand, a representative with MetLife, Inc., New York. MetLife is also seeking ongoing commitment from commissioners on speed-to-market issues through statutory, regulatory or administrative means, she said.
Consumer representatives expressed concern over how LTCI is included in the compact, but for different reasons than those of insurers. There is potential through the compact for raising standards across the country if regulators revisit standards in existing long term care models and incorporate the strongest standards in the compact, according to Bonnie Burns, a representative with California Health Advocates, Scotch Valley, Calif.
If the compact is going to provide uniform standards, it is only fair to consumers that such standards be strong, she said. Failure to establish strong standards could create the need for changes five, 10 or 15 years down the road, said Burns, adding such changes are not retroactive.