NU Online News Service, June 14, 2004, 6:26 p.m. EDT, San Francisco – State insurance commissioners have recommended changes to another group’s market conduct surveillance model act.[@@]
Members of the National Association of Insurance Commissioners, Kansas City, Mo., voted here at the NAIC summer meeting to approve changes to a model developed by the National Conference of Insurance Legislators, Albany, N.Y. The NAIC is offering the changes to NCOIL as recommendations. NCOIL will look at the recommendations during its own summer meeting next month and decide if the changes should be incorporated into a model it adopted in February.
A finalized NCOIL model will then be returned to the NAIC for an up or down vote.
The NAIC and NCOIL are going through this process in an effort to come up with a single model, rather than letting 2 versions go before state legislators, according to NAIC Secretary Treasurer Joel Ario, the Oregon insurance administrator.
In the past, “the industry has played the 2 organizations off of each other,” Ario said.
Introducing just one model will increase the odds that a model will be enacted, Ario said.
The remarks echoed earlier remarks made by State Sen. Steven Geller, Fla., NCOIL’s president. During a consumer liaison meeting, Geller said that “candidly, a lot of folks would prefer to put NCOIL and NAIC at each other’s throats.” The reason he said, is that opponents of state regulation then could argue that regulators and legislators need federal oversight.
“NAIC and NCOIL decided we are not going to play that game,” Geller said later, during an interview. “We’re invoking the no gaming rule.”
Birny Birnbaum, executive director of the Center for Economic Research, Austin, Texas, and an NAIC-funded consumer representative, said it is important that the model advances. He noted that neither consumers nor insurers are happy with existing market conduct regulation. “It is ready for reinvention,” he said.
Market conduct surveillance “could be the issue that demonstrates to Congress that there is a reason for state regulation,” Birnbaum said.
If regulators can show that they have “the skill and will to do it, it should put to rest questions about state regulation that comes up before Congress,” he said.
The American Council of Life Insurers, Washington, believes that the NCOIL model is a good base to work from, according to Linda Lanam, vice president-annuities with ACLI.
ACLI is “very concerned about some of the comments made that industry wants nothing to happen,” Lanam said. She added that the ACLI is “very supportive” of the market conduct model efforts.
She said that the ACLI would like to see market analysis be the focus of market conduct examinations.
In the long term, the ACLI would like to see market conduct include deference to market conduct initiatives taken by a company’s state of domicile, Lanam said.