High Turnover Means Educating New Commissioners On The Issues

This means that education for legislators will be needed on lowering the minimum crediting rate on fixed annuities to reflect current interest rates, another issue important to the ACLI, according to Ferguson.

This will be particularly so, he says, if a benchmark index that is being developed receives sufficient support to warrant amending temporary legislation in 18 states that allows for a 1.5% minimum crediting rate as well as bringing the index approach to remaining states.

Ferguson says that another factor, looming state deficits, will also come into play. State legislatures will turn their attention to balancing budgets before they address pending bills, he says.

Additionally, revenue-shy states may increase fees, seek the possible elimination of offset fees for insurers and make cuts to state insurance departments as part of a broader program of state budget reducing efforts, Ferguson says.

Don Cleasby, assistant vice president and assistant general counsel with the National Association of Independent Insurers, Des Plaines, Ill., also notes the changes in insurance departments and state houses, but says there is no indication broad changes in business or consumer sentiment are occurring.

Education will be important since new commissioners either may not have insurance experience or may have experience in one area such as life insurance or property-casualty insurance, Cleasby continues.

But, even with changes there are still many seasoned insurance regulators among insurance staff in place that can help bring their new commissioners up to speed on issues, he adds.

What will be important at NAIC is continuing the momentum on issues like market conduct reform, he says.

There will always be turnover among state legislators, says Tim Tucker, director of state and federal affairs with the National Conference of Insurance Legislators, Albany, N.Y.

NCOIL seeks to fill any such void with education on insurance issues, he says. This becomes more important, he adds, in a year when state insurance regulation is being questioned and when a project like the interstate compact is being advanced.

Even with changes among commmissioners, Tucker remains confident that “departmental continuity” will provide a seamless transition.

Reproduced from National Underwriter Edition, February 3, 2003. Copyright 2003 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.