NU Online News Service, June 14, 2004, 6:26 p.m. EDT, San Francisco – The American Council of Life Insurers, Washington, is raising questions about an effort to create a single point of filing for life insurance products.[@@]

“Are we heading in the right direction or are we heading for a ditch?” Diane Marchese, an ACLI representative, asked here during a session at the summer meeting of the National Association of Insurance Commissioners, Kansas City, Mo. “There is serious danger that [the project] will fail to meet its objective.”

The NAIC seems to be letting a minority of states set standards for the compact, and that reliance on a handful of states could be putting the compact project “significantly off course,” Marchese said.

Marchese added that the compact project could end up doing as poorly as she believes the Coordinated Advertising Rate and Form Review Authority, another NAIC effort to establish a multistate review organization, has done.

The NAIC must balance the need for speed with the need for an end product that is useful, Marchese said.

Another ACLI representative, Miriam Krol, who has been participating in the development of the compact standards, said the ACLI is not trying to criticize the NAIC. Instead, she said, the ACLI wants to tell the NAIC now, rather than 2 years down the road, that ACLI members might have a problem with using the compact if the requirements of a few states become compact standards.

But NAIC President Ernst Csiszar, the South Carolina commissioner, accused the ACLI of contradicting earlier comments about the compact standards.

“I recall very vividly [the ACLI] saying that we can live with any standards as long as they were uniform,” Csiszar said. “I don’t think you should be playing both sides of the game. Standards [for the compact] will be in place by December. ACLI cannot speak out of both sides of its mouth on this one.”

Alabama Commissioner Walter Bell, the head of the product filing compact project, said most insurers are national companies that already adhere to the requirements of “minority” states.

The NAIC wants to continue to work with the ACLI on the compact issue, but the whole process has been open to comments from the ACLI, and one important factor is the market share of the states that are working on the standards, Bell said.