The National Conference of Insurance Legislators approved an amended list of suggested changes to a market conduct model surveillance law at its recent meeting here.
NCOIL approved its original model last winter and enlisted the support of the National Association of Insurance Commissioners.
But the regulators balked at a blanket endorsement and instead offered a list of recommended changes that many lawmakers felt diluted the intent of the original model by maintaining unlimited discretion in conducting market conduct exams.
After a spirited round of last-minute drafting conducted with the aid of industry representatives, lawmakers were presented with a series of recommended changes they approved contingent on NAIC approval in the coming weeks.
After some reluctance, the NAIC point man on market conduct reform, Oregon Administrator Joel Ario stated he would guarantee at least 45 (out of 54) votes for approving the amended document within the next few weeks.
NAIC President Ernst Csiszar and his NCOIL counterpart, Florida state Senator Steve Geller, have been ardent advocates of presenting a united front in the face of opposition from some elements of their organizations who feel too much was being compromised along the way to make it worth it.
Geller went so far as to say that opponents of the joint effort were really federal regulation advocates bent on proving that even the legislators and regulators could not agree on reform measures.
He said the current version of the so-called regulatory reform road map put forth under the aegis of Reps. Michael Oxley, R-Ohio, and Richard Baker, R-La., would have “a disastrous impact on state insurance regulation.”
“Oxley seems bent on undercutting state insurance regulation, and he has brought the NAIC and NCOIL closer together now than they have been in many years,” he said.
In what he only half-jokingly termed were carefully scripted remarks approved after arduous negotiations and drafting all week, Geller said the industry, while not supporting the latest draft, has agreed not to oppose it. And he also made clear that the complex issue of market conduct will require much more work in the future to satisfy all the parties who feel the current document remains inadequate to meet the task at hand.