Product Compact Work Continues
As 2003 Legislative Session Nears
The latest version of the National Association of Insurance Commissioners interstate compact draft was due out last Friday.
The compact is an effort to create a streamlined, single point of filing for life insurance products that would strengthen the case for state insurance regulation.
A regulator-only conference call was held on 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 it can be included in the 2003 legislative session in states.
State legislators including the National Conference of Insurance Legislators, Albany, N.Y., are supporting the measure. Groups including the American Association of Retired Persons and the American Council of Life Insurers raised concerns over points in the current draft. At press time, 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, she says when its board meets on Oct. 13, it will be looking at three points it considers critical for support.
Those points, she says, include: a states right to opt out of the compact if it did not want to participate in it 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 once states agree to participate in the compact that they cannot readily opt out of the agreement. Language in the draft also needs to be strong enough so the compacts provisions would not be preempted, Parachini adds.
And, with the exception of long-term care insurance, where advertising is now filed with state regulators, products including disability insurance, life insurance and annuities, should not have advertising filing requirements with the compact, she says. This would create a new standard for insurers who do not currently have to file advertising for these products, she says.
The reason ACLI will be looking at these points when the new draft comes out is because it will be a “heavy lift” getting the compact enacted in states. Language must be the same in different states and it will be difficult to make changes once enacted, Parachini explains.
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Reproduced from National Underwriter Life & Health/Financial Services Edition, September 30, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.