NU Online News Service, Nov. 27, 5:17 p.m. – A draft of a compact that would allow life insurance products to be filed in a single place moved closer to reality today.

Members of a working group at the National Association of Insurance Commissioners, Kansas City, Mo., voted unanimously to submit an amended Interstate Insurance Product Regulation Compact draft for full consideration by the executive committee and plenary. A vote would be held during the winter NAIC meeting that begins next week.

The vote was taken by roll call. The states that voted to advance the draft are California, Michigan, New York, Ohio, South Carolina, Texas and Wisconsin.

California noted, however, that although it was voting to advance the model, it still had constitutional concerns regarding the premise of the compact and might not support the compact in a final vote.

Regulators first voted on amendments to the compact draft and then voted on presenting a revised draft that included these amendments to the full NAIC body.

Issues raised included how broadly consumer representation should be defined. The Minnesota attorney general’s office also suggested that, even though a section dealing with state legal actions was revised, the draft would still preempt the right of an attorney general to pursue legal action.

But, in general, the tone of the discussion was calmer than the tone of a public hearing held in mid-November.

Alice Weiss, director of health policy with the National Partnership for Women & Families, Washington, asked whether the new language underscoring consumers’ legal rights was too limiting. Regulators told her the language was typical of language used by legislators and not intended to be limiting.

The language that was adopted reads:

“No action taken by the Commission shall abrogate or restrict: (i) the access of any person, including the attorney general, to state courts; (ii) remedies available under state law related to breach of contract, tort, or other laws not specifically directed to the content of the Product; or (iii) state law relating to the construction of insurance contracts.”

The issue of representation through advisory committees was also broached.

Larry Mirel, commissioner of the District of Columbia, asked how broadly the definition of consumer would be interpreted. He cited deregulation of commercial lines as an example of the need for a broad definition.

In the commercial markets, the consumers are small businesses, and those consumers need help with representing their views, Mirel said.

Birny Birnbaum, executive director for the Center for Economic Justice, Austin, Texas, asked why an industry advisory committee would be created under the compact.

Frank Fitzgerald, Michigan insurance commissioner and chair of the interstate compact working group, said the compact body would seek input from a wide array of constituencies. That is why legislative, industry and consumer advisory committees are being formed, he added.

The American Council of Life Insurers, Washington, said it would recommend to the chief executives of member companies that the compact draft be supported.