Product Filing Compact Takes Tentative Step Forward
A draft model of an interstate compact that would create a single point of filing for life insurance products took a tentative step toward adoption on Oct. 11.
A working group of the National Association of Insurance Commissioners, Kansas City, Mo., adopted an amended model but excluded several contentious issues that were raised during the compacts discussion. Those issues will be addressed more fully before the model goes before the NAICs executive and potentially plenary committee on its way to full adoption.
Insurance regulators and legislators say that the compact is the best way to preserve efficient state regulation and show that there is not a need for federal regulation of insurance.
Nine states voted to proceed with the draft although states including California and Florida qualified their vote by noting the need for strong standards in the compact. Florida remains concerned about the time permitted to opt out of a standard before the standard would become a requirement for that state.
The drafts opt-out provision has been considered an important one. Compact supporters say that it is needed to ensure uniformity while some state regulators maintain that they want the option to opt-out of a compact standard if they believe standards in their states are more exacting.
The current draft has a 90-day time frame for a stay if a compact state is going to opt out of a standard.
However, regulators in states such as Florida have indicated that in some cases, it can take as long as a year to advance an opt-out through legislation or a rule and in some cases there is no option to develop an emergency rule to opt out of a compact standard.