Work On Interstate Compact Work Proceeds As Summer Meetings Near

One of the amendments, made by the Indiana House of Representatives changed language to say that the internal accounts and audit papers are not confidential and that such material must be shared with the commissioner of any compacting state.

The compact model has been passed in one house of Indianas state legislature and has been introduced in Alabama, according to NAIC spokesman Matt Brisch.

On May 7, Iowa Governor Tom Vilsack signed the compact into law, said Scott Kinney, a spokesman for the Iowa insurance department.

In preparation for the NAICs summer meeting in New York from June 21-24, regulators are working on standards for product areas including disability insurance, long term care insurance, annuities and life insurance.

Regulators involved decided to focus on product standards for individual, group and business overhead DI products. While their discussion touched on whether products should be examined as short term and long term, it was decided to look at DI as one product because that is the way it is offered on the market.

A look at long term care standards will start with an examination of both individual and group LTC products.

One discussion revolved around the use of the definition of LTC in the existing Long Term Care Insurance model act and regulation and how it encompasses any benefit purporting to have an LTC component.

Louise Kamikawa, a California regulator who is overseeing the effort, noted that “it establishes the floor. I want everyone to be clear on that.” States such as California have long term care regulation that is considered to be more rigorous than other states.

In the annuity product area, it was decided to start with standards for a simple individual variable and fixed annuity that was developed for the Coordinated Advertising Rate and Form Review Authority project. Then standards would be created for products with “bells and whistles” and additional product features, according to a discussion.

Work on life insurance standards will also start with existing CARFRA standards for basic term life products and then work on individual universal life standards, according to a discussion among regulators. And, in theory, regulators say, work on the term life standards could be altered sufficiently to work well for whole life insurance standards.

Meeting a goal of developing standards for five products was also brought up. But at least one regulator noted that the process was slow when the CARFRA project was being developed, and more time might be needed in the compact effort.

The relevancy of the products chosen for which to develop standards was also raised.

Reproduced from National Underwriter Edition, May 19, 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.