State Legislators Intend To Pursue A Market Conduct Model Law

Another component of the NAICs effort is a data call that is part of the market conduct annual statement. During the meeting here, Sue Stead, an Ohio regulator spearheading that effort moved that the data call for both life and property-casualty companies be extended another year.

The motion was carried, but it has raised questions and concerns among insurers who have maintained that the existing data already collected should be analyzed before the pilot is extended.

“Our members are significantly concerned over the costs and resources involved in this pilot project,” Linda Lanam, vice president and deputy general counsel of the American Council of Life Insurers, Washington, told regulators.

Lanam requested that information already available to regulators from companies financial statements not be included in requested information insurers would have to program.

The reaction of property-casualty trade groups is “one of disappointment,” said Dave Reddick, market regulation manager with the National Association of Mutual Insurance Companies, Indianapolis. Reddick was speaking for a joint trade group of p-c companies. “It is patently unfair of you to decide to extend the project given that the data is not due from the first one.”

There is no detail as to how the extended pilot will be implemented, Reddick said.

“We are disappointed,” said Lenore Marema, vice president of legal and regulatory affairs with the Alliance of American Insurers, Downers Grove, Ill. The decision was made “without seeing the data [from the first call] and without giving a rip about costs.”

A third market conduct issue that was debated was the possibility of a privacy survey that would measure how companies are complying with privacy requirements.

Birny Birnbaum, executive director of the Center for Economic Justice, Austin, Texas, said consumer representatives should have the same input that the industry had to the survey.

Joel Ario, Oregon insurance regulator responded by saying that the survey was part of a market conduct exam and was usually exclusively handled by regulators. However, he continued, if there was a consumer advocate with particular experience in privacy then, it could be possible for them to look at the survey. But, Ario added, it would have to be done quickly because regulators intended to proceed with the project.

But, Larry Mirel, commissioner with the Department of Insurance and Securities Regulation for the District of Columbia, asserted, “We are the regulators of insurance. It is our job to determine the questions to ask.”

Reproduced from National Underwriter Life & Health/Financial Services Edition, June 30, 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.