State Legislators Intend To Pursue A Market Conduct Model Law
State legislators confirmed plans to develop a market conduct model law and asked insurance regulators to work with them.
Insurance regulators have been working for over two years on several market conduct initiatives of their own and continued to do so at the summer meeting here of the National Association of Insurance Commissioners.
Over four years ago, NCOIL recognized the “inefficiency and redundancy” in market conduct regulation, Rep. Kathleen Keenan, D-Vt., and president of the National Conference of Insurance Legislators, told NAIC members during an open session.
Keenan noted the NAICs initiatives but said that “without statutory underpinnings, interstate agreements or other initiatives to reform market conduct regulation will last only as long as the policymakers who signed it remain in office or until they change their minds.”
NCOIL will probably begin drafting the model law shortly, said state Sen. Steven Geller, D-29th District, Fla., NCOIL vice president. The report could include recommendations from a recent report of NCOILs research arm, the Insurance Legislators Foundation.
Recommendations include domiciliary state primacy over market conduct regulation, CEO self-certification of compliance, targeted market conduct exams, and recognition of self-critical analysis, Geller told commissioners.
Keenan said there is “real concern over federal preemption,” and NCOILs plan is to have a model law ready by the fall.
Mike Pickens, NAIC president and Arkansas insurance commissioner, said NAIC would provide NCOIL with an update of where its committee activities stood and NCOIL would allow for input once a model was developed.
One element of market conduct that regulators have been working on is reciprocity among states, which Nebraska Director Tim Wagner said needs to advance at a quicker pace.
“We have talked for three years, but we need more names on the dotted line. We have to have some tangible movement,” Wagner said. A reciprocity goal of 15 states has been established for year-end 2003, he added.