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NCOIL Changes Market Conduct Model

By Jim Connolly

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Members of the National Conference of Insurance Legislators, Albany, N.Y., agreed today at their summer meeting in Chicago to include new procedural safeguards in the NCOIL market conduct model.[@@]

Earlier, NCOIL included references to the Market Analysis Handbook, a guide developed by the National Association of Insurance Commissioners, Kansas City, Mo., in its Market Conduct Surveillance Model Act.

Insurers had raised concerns that an NCOIL market conduct model that referred to the NAIC’s Market Analysis Handbook could give the NAIC an indirect, de facto ability to change the effect of state insurance laws by changing the handbook.

If NAIC moves changed the handbook, and state laws based on the NCOIL model required insurers to comply with the current handbook provisions, then insurers and other parties would have no opportunity to object to handbook-driven changes in the effect of state insurance laws, the insurers have argued.

The revised NCOIL model now offers 3 options for parties that want to object to changes in the NAIC handbook from automatically changing the effect of state insurance laws:

- Public notice could be given and the opportunity for a public hearing offered.

- An opportunity for an informational public hearing could be offered if there were a material change to a statute or administrative rule.

- Notice and the opportunity for a public hearing would be offered if any changes were necessitated to a statute or an administrative ruling or if a commissioner’s actions deviated substantially from NAIC work products.