An initiative that would channel life insurance product filings through an interstate compact is the focus of intensified efforts on the part of insurance regulators who hope to present a finalized plan to legislators within weeks.
“The action is not in the states now. The action is with the NCSL and NCOIL,” says Terri Vaughan, Iowa insurance commissioner, immediate past president of the National Association of Insurance Commissioners and an initiator of the idea of a compact approach.
The Interstate Insurance Product Regulation Compact was just made law in Iowa and was introduced this legislative session in Alabama and Indiana.
But, before regulators and legislators turn their full attention to state houses, legislators at the National Conference of State Legislatures, Denver, and the National Conference of Insurance Legislators, Albany, N.Y., must support the proposal, according to Vaughan.
Indeed, the NCSL is looking at the compact as well as proposed amendments to it. NCSLs task force could vote on the proposal later this month and present it to the organizations executive committee for full approval during its annual meeting in San Francisco in July.
The National Conference of Insurance Legislators, Albany, N.Y., could take action during its meeting in Williamsburg, Va., in July.
Vaughan says that as current work on product standards for the interstate compact shows, regulators are determined to make the compact operational.
Compact standards are now being developed for products including annuities, disability insurance, long term care insurance and life products.
In fact, regulators are developing those standards now in anticipation of the summer NAIC meeting in mid-June. Discussions are turning not only to the nitty-gritty of creating standards but also to broader topics such as how to meet consumer needs without causing unnecessary expense for companies.
For instance, during a recent working session of regulators who are developing annuity standards, the issue arose over what a state insurance deparment would do if it has legal requirements to meet but compact standards ultimately require something different.
Texas, for example, requires that there be a disclosure of guaranty fund participation and a toll-free number for a carrier in the policy contract. However, not all states have such a requirement.