NU Online News Service, Sept. 26, 8:25 p.m. – The National Association of Insurance Commissioners, Kansas City, Mo., is scheduled to release the latest version of its interstate compact draft Friday.
The draft is an effort to create a streamlined single point of filing for life insurance products that would strengthen the case for sticking with state insurance regulation, rather than moving to optional or mandatory federal regulation.
A regulator-only conference call was held Sept. 24 to discuss points made during the fall NAIC meeting three weeks ago. The draft is on a fast track for adoption at the NAIC, so that states can act on the final version during their 2003 legislative sessions.
The National Conference of Insurance Legislators, Albany, N.Y., is supporting the measure.
Other groups, such as the American Association of Retired Persons, Washington, and the American Council of Life Insurers, Washington, have criticized some sections of the current draft.
At press time, the AARP could not be reached for comment.
The ACLI supports the idea of a compact, according to Patricia Parachini, ACLI senior director-state relations. However, Parachini says, the ACLI board will be looking at three critical points when it discusses the draft Oct. 13.
She says those points include a state’s right to opt out of the compact if it does not want to participate in the compact for certain product lines; the inclusion of advertising requirements as part of the compact; and preemption of provisions in the compact.
Parachini explains that, for the sake of uniformity, it is important that states not readily opt out of the compact once they agree to participate. Language in the draft also needs to be strong enough so that the compact’s provisions would not be preempted, she adds.
And, with the exception of long-term care insurance, for which advertising is now filed with state regulators, other products should not have advertising filing requirements with the compact, she says.
Creating compact advertising filing requirements for disability insurance, life insurance and annuities would create a new standard for insurers that do not currently have to file advertising for those products, according to Parachini.
In any case, ACLI will be looking at the new draft closely, because getting the compact enacted will be a “heavy lift,” Parachini says.
Language must be the same in different states, and making changes will be difficult once the model is enacted, Parachini says.