NU Online News Service, June 2, 2004, 6:23 p.m. EDT – The National Association of Insurance Commissioners may be getting closer to adopting a market conduct surveillance model act.[@@]
Joel Ario, secretary-treasurer of the Kansas City, Mo., group, says the NAIC probably will adopt a market conduct model at its upcoming June 9-15 meeting, or even earlier.
The draft model before the NAIC executive committee is based on a model that was adopted by the National Conference of Insurance Legislators, Albany, N.Y., in February. It contains changes to the NCOIL model that received significant comment from regulators, NCOIL and both life and property-casualty insurers.
Ario, the Oregon insurance administrator, who is spearheading the market conduct effort, says all interested parties are part of the discussion and that changes in the NAIC version of the model were really clarifications of points that had been left vague in order to reach consensus when NCOIL was putting the model together. The NAIC draft is an effort to drill down on those points, Ario says.
He says, for example, that discussion continues about whether the model should be worded so that changes to a handbook for market conduct would be automatic when the NAIC makes changes, or whether action would have to be taken by state legislators in each state.
If no consensus is found with the current draft, one option would be to adopt the NCOIL version of the model, Ario says. However, there are changes that regulators felt should be made, so there are differences with the legislators’ version of the model, he says.
But Ario says the core principles are the same for both versions: market analysis is the foundation of the program, and the use of resources is based on market analysis.
“We are urging the NAIC to adopt the NCOIL model that was adopted by us in February,” says Tim Tucker, NCOIL director of state-federal affairs. “It is a good compromise that will improve market conduct exponentially.”