NAIC Adopts Market Conduct Model

The model would give insurers the right to challenge statutory authority of examinations and require desk examinations, as opposed to on-site examinations, Gomez said.

Gomez also asked whether hiring a young examiner might violate a model provision that requires insurance departments to hire qualified staff. He said his department does not have the staff to handle the litigation that might result from conflicts over examiner qualifications.

Joel Ario, Oregon insurance administrator and NAIC vice president, responded by emphasizing the model’s reliance on market analysis. He also noted that a recent call for data on credit scoring will be the target of a lawsuit, and he said that shows that the industry can sue even under the current rules.

Before the vote on the model, regulators also asked about whether lawsuits could be brought against commissioners and their representatives for initiating market conduct actions.

Following the vote, Tim Tucker, an NCOIL representative, said that work to get the joint NCOIL-NAIC model adopted would begin right away. He said the model was introduced last session in Nebraska and New York. Bruce Ferguson, a representative for the American Council of Life Insurers, Washington, said the ACLI prefers the version of the model that NCOIL approved in February.