NU Online News Service, Feb. 6, 2004, 3:47 p.m. EST – The National Conference of Insurance Legislators seems to be moving away from a strict domestic deference approach to market conduct regulation.[@@]
Instead, the lawmakers who belong to the Albany, N.Y., group continue focus on a “domestic deference lite” approach, according to sources familiar with the group’s Market Conduct Surveillance Model Act draft.
NCOIL members will be discussing the draft Feb. 26-29 in San Antonio, at NCOIL’s spring meeting. NCOIL could adopt the model at the meeting.
The term “domestic deference” refers to the concept of state insurance regulators deferring to the regulators in an insurance company’s state of domicile. NCOIL has removed an early domestic deference provision from the market conduct draft.
But the narrow version of the provision that is in the current draft may be more viable, sources say.
The domestic deference lite approach would make it possible, but not mandatory, for a commissioner in one state to accept a market conduct report prepared by the insurance commissioner in an insurance company’s state of domicile, according to Linda Lanam, vice president-annuities with the American Council of Life Insurers, Washington.
Other reactions to the market conduct draft:
- Some insurers say referring to the National Association of Insurance Commissioners, Kansas City, Mo., in the model would give the organization undue authority.
- Birny Birnbaum, an NAIC-funded consumer and executive director of the Center for Economic Justice, Austin, Texas, says requiring state insurance regulators to wait for the NAIC to act on an issue would make regulation too slow. Regulators need to act in a quick and timely manner, Birnbaum says.
- Birnbaum disagrees with the idea of including any wording that would create a 30-day period before the results of a market conduct report would become public. He says regulators should make the reports public once the reports are completed.
- Birnbaum wants NCOIL to leave in a whistleblower provision. He says current whistleblower laws are not sufficient to protect agents and others who report wrongdoing.