NU Online News Service, June 12, 2003, 5:30 p.m. EDT – State lawmakers need to hold more discussions about the idea of creating a new market conduct law and learn more, according to Tim Tucker, director of state-federal affairs with the National Conference of Insurance Legislators, Albany, N.Y.
Discussions in Congress have suggested a need for action, and insurance trade groups want NCOIL to work with the National Association of Insurance Commissioners, Kansas City, Mo., Tucker said.
NCOIL recently sponsored a public hearing on improving the market conduct examination process.
The American Council of Life Insurers, Washington, submitted testimony saying that it would discuss a model law proposal with members. But it also advocated more immediate actions, such as encouraging insurer self-audits.
Regulators also must improve coordination of multistate examinations and encourage states to accept examinations done by other states, the ACLI said.
Nebraska Insurance Director Tim Wagner said in an interview that, at this point, it is “premature” to start drafting a model.
The parties involved should talk more about the subject at the NAIC and NCOIL summer meetings, Wagner said.
Wagner heads an NAIC effort to encourage states to collaborate on examinations and accept examinations conducted by insurers’ states of domicile. Five states are participating in the collaborative arrangements.
Wagner maintains that the domestic regulator should be responsible for the market conduct oversight of insurers in its jurisdiction.
Only five states are participating in reciprocity, but there is a goal of getting 15 states to participate, Wagner said.
“There are entrenched interests at the NAIC” but a reciprocity agreement among interested states makes it possible to “go outside of the NAIC committee structure,” Wagner said.
The “entrenched” regulators are “in fact, a minority” who are protecting their own interests, Wagner said.
Scheduling periodic examinations by states of domicile is one way to approach regulation, but some states prefer a targeted approach, and “a lot of states are asking why they need to conduct market conduct examinations at all,” Wagner said.