NU Online News Service, Sept. 27, 2:10 p.m. – The National Association of Insurance Commissioners, Kansas City, Mo., is about to start a detailed data-collection pilot project that could be used to change state market conduct examinations.
The NAIC is setting up a Web site to support the data call. Insurers will be able to download information from the Web site and submit their data to the NAIC through the site.
The site will also list contacts in the nine states that are participating in the data call.
Originally, 10 states had planned to participate, but the Arizona insurance department backed out because it said it could not guarantee that Arizona public information laws would permit it to keep the company data confidential.
Insurers have told regulators that they are worried about the program leaking trade secrets and other confidential information to the public.
Insurers say they are also worried that trial lawyers could use the information to attack them with class-action suits.
Because of confidentiality concerns, the data will be passed on through the site to individual state insurance departments. The individual departments will analyze the data for market conduct outliers. Regulators have said that they are confident that this system can protect companies’ information and allay their concerns.
The NAIC will send letters requesting data this week to the presidents of insurance companies or the executive listed after the president in the last annual statement.
The pilot will start with life insurance companies, which will have 90 days to complete the request. Regulators hope to prepare a life industry report in early 2003.
The property-casualty industry will start the data-gathering process in the first half of 2003, with a report due later in 2003.