Market Conduct Model Tennis Match Continues
A market conduct surveillance model act is back at its source following a decision by state insurance regulators to offer recommendations to state insurance legislators.
State insurance commissioners adopted changes to the Market Conduct Surveillance model act that was developed by the National Conference of Insurance Legislators, Albany, N.Y.
The changes were adopted by the National Association of Insurance Commissioners during its summer meeting here. Those changes are being offered to NCOIL as recommendations. NCOIL will look at those recommendations during its summer meeting next month and decide if they should be incorporated into the model it initially developed and adopted in February.
A finalized NCOIL model will then be returned to the NAIC for an up or down vote, although, NAIC Secretary Treasurer and Oregon Administrator Joel Ario noted that it is conceivable that when it is returned to state regulators someone could offer an amendment.
Wisconsin Insurance Commissioner Jorge Gomez expressed disappointment that a document reached by consensus of state insurance regulators was not going to be adopted.
Ario explained that if the NAIC adopted its version of the model rather than send it back to NCOIL, there would be 2 versions of the model before state legislators. “The industry has played the 2 organizations off of each other,” Ario said. By working to create a single model that everyone signed onto, it would be more likely that the model could be enacted, he explained.
The remarks echoed earlier remarks made by State Senator Steven Geller, Fla., NCOILs president. During a consumer liaison meeting, Geller said, “Candidly, a lot of folks would prefer to put NCOIL and NAIC at each others throats.” The reason, he said, was they could argue that regulators and legislators could not get along and consequently, some federal oversight was needed.
Later, Geller told National Underwriter, “NAIC and NCOIL decided we are not going to play that game. Were invoking the no gaming rule.”
When NCOIL addresses the market conduct model next month, said Tim Tucker, an NCOIL spokesperson, it might revisit requiring companies to have internal systems in place to verify compliance with market conduct requirements. The possible rub, he said, would be if regulators wanted broader authority.