Market Conduct Pilot Launches This Week
A data collection project that could be used as a basis for targeting market conduct examinations is ready to launch this week.
The pilot is being developed by the National Association of Insurance Commissioners, Kansas City, Mo. It is one of several efforts by regulators to streamline the market conduct process so that resources can be used more efficiently. Another effort under way is a How-to guide that would offer regulators guidance on market conduct compliance by focusing on complaints, market share and supplemental pages filed with an insurers annual statement.
The launch will include a Web site devoted to the data call project. Companies will be able to download documents and send data through the site. The NAIC site will also list contacts in nine states that are participating in the pilot.
Initially, 10 states were scheduled to participate in the pilot. However, the Arizona insurance department said it could not guarantee that data that companies submitted to it through the NAIC site could be kept confidential because of state laws on public information.
The issue of confidentiality was one of the major concerns of insurers as the details of the project were advanced. Insurers told regulators they were concerned that trade secrets and other information could become public and that information could be used by class-action attorneys against companies.
Because of this concern, the data will be passed on through the site to individual state insurance departments which will analyze the data for market conduct outliers. Regulators have said they are confident that in this way, they can protect information and allay insurers concerns.