By

A proposal for an interstate compact that would allow a single point of filing for life insurance products has moved closer to becoming a reality.

Regulators participating in the compact effort advanced by the National Association of Insurance Commissioners voted to move an amended Interstate Insurance Product Regulation Compact draft for full consideration by the NAIC executive committee and plenary. A vote is to be held during the NAIC winter meeting this week.

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

California noted, however, that although it voted to advance the model, it still had constitutional concerns regarding the premise of the compact and might not support it 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.

One issue raised was how broadly consumer representation should be defined. The Minnesota Attorney Generals office also raised a concern that attorneys generals rights to pursue legal action would still be preempted even with new language in the draft.

But in general, the tenor of the discussion was relatively understated in comparison to an earlier public hearing held in mid-November.

Alice Weiss, director of health policy with the National Partnership for Women & Families, Washington, raised the issue of whether the new language underscoring consumers legal rights was too limiting. Regulators made assurances that the language was typical of that 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 was being interpreted. He said, for instance, that on the issue of commercial lines deregulation, small businesses were consumers, and their voices deserved to be represented. He argued that the definition of a consumer should be viewed more expansively.

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 input was being sought from a wide array of constitutencies and that is why legislative, industry and consumer advisory committees are being formed.

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


Reproduced from National Underwriter Life & Health/Financial Services Edition, December 8, 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.