NU Online News Service, Sept. 26, 2003, 9:25 a.m. EDT – Market regulation ranked just behind consumer protection as the number one concern of a regulatory modernization action plan released by the National Association of Insurance Commissioners, Kansas City, Mo., during its recent fall meeting.
The goal of consumer protection in the document refers to access to information.
During the meeting, insurers also asked that regulators’ process of bidding for contracts be more transparent, such as the recent award of a privacy market conduct survey to PricewaterhouseCoopers by the District of Columbia department of insurance and securities regulation.
Robert Zeman, senior vice president with the National Association of Independent Insurers, Des Plaines, Ill., expressed concern that any improvements to regulation consider the use of contract examiners as well as more transparency.
District of Columbia Commissioner Larry Mirel responded that the process has been an open one in which he was available to respond to industry concerns.
The regulators’ statement, an update of a commitment plan rolled out three years ago, received general support from attendees at the meeting, although two trade groups, the National Association of Independent Insurers and the National Association of Mutual Insurance Companies, Indianapolis, expressed concern that personal lines were not specifically mentioned along with commercial lines.
There was broad support among industry trade groups for the way a market conduct analysis handbook was shaping up. A new draft will be ready in October, and the how-to guide is scheduled to be released in 2004, regulators said.
A data call effort is being called valuable by regulators who say it provides information that helps them identify problems. But it received mixed reviews from the industry during the fall meeting.
Life insurers are continuing to talk to regulators about what information will be provided in a second round of data gathering which is under way and expected to be presented to regulators in April 2004. For example, data on group annuities will not be included because it was agreed that such contracts are usually part of group pension plans and less likely than individual annuities to be affected by market conduct problems.
During the meeting, Lenore Marema, vice president-legal and regulatory affairs with the Alliance of American Insurers, Downers Grove, Ill., shared the findings of a survey of a few insurers on what the data call is costing them.
The companies said that providing data in several of the nine states participating in the pilot project would cost between $4,500 and $10,000. When they provided data in all nine states, the cost ranged from $16,500 to $25,000. The findings were in line with an initial survey that projected average costs to be approximately $16 million based on a joint trade group survey.
A national system of data storage, also discussed at the meeting, would be a “deal breaker for us,” said Marema. He expressed concern over protection of trade secrets and proprietary company information. “Some protection is no protection at all,” he said.