NU Online News Service, Feb. 27, 2004, 2:29 p.m. EST – A committee at the National Conference of Insurance Legislators, Albany, N.Y., has approved a major market conduct model.[@@]
NCOIL’s state-federal relations committee Thursday voted unanimously in favor of the Market Conduct Surveillance Model Act at the NCOIL spring meeting in San Antonio.
Observers expect NCOIL’s executive committee to consider the model today.
NCOIL began developing the model 6 months ago. If states adopt the model, it could create a standard approach to regulation of insurers’ market conduct practices.
State legislators looked at 4 issues before the committee vote was taken.
- A provision that would have required chief executives of insurance companies to certify that the companies had appropriate market conduct procedures in place was removed from the model.
- A provision that would have included an arbitration process for insurers that were dissatisfied with the outcomes of market conduct examinations was removed from the model.
- The issue of restitution was not included in the model.
- Language that refers to work products, including model laws and regulations developed by the National Association of Insurance Commissioners, Kansas City, Mo., was left in the model.
Tim Tucker, NCOIL’s director of state-federal affairs, says the next step for NCOIL will be to educate legislators about why the model should be adopted. He says that Nebraska lawmakers already are talking about the model, and that other state legislatures could consider the model during the current legislative session.
The American Council of Life Insurers, Washington, and the National Association of Mutual Insurance Companies, Indianapolis, expressed preliminary support for the adopted model.
Kevin Hennosy, a consumer advocate and publisher of SpreadtheRisk.org, Kansas City, Mo., says he supports the model because it takes a targeted, step-by-step approach to creating a system for market conduct regulation. Congress should look at the model when it considers market conduct regulation, Hennosy adds.