San Antonio, Texas
Five states are not waiting for national implementation of the Interstate Compact in order to speed up the approval process on product filings.
The states have formed a so-called “mini-compact” that permits participating states to join in a reciprocal insurance product approval process, said Texas Insurance Commissioner Jos? Montemayor in a speech here at a life insurance conference co-sponsored by LIMRA International, LOMA, Society of Actuaries, and American Council of Life Insurers.
Once a product is approved in one of the participating states, the commissioner said, the product is deemed approved for use in the other participating states.
Ten states already have adopted the full interstate compact, and 19 more will consider it this year, Montemayor said. However, he added, since the interstate compact wont be effective until adopted by 26 states or by states representing 40% of premium volume for designated products, uncertainty continues concerning the actual effective date.
But some states have taken a “why wait?” approach to the issue, he said.
Initially 3 of them formed the mini-compactNevada, Georgia and Texasand 2 moreCalifornia and Floridajoined recently. The mini-compact can be viewed as a precursor to the full interstate compact, Montemayor said. “The key for us is that it sets common standards, and it pools our resources in common technologies.”
So far, the mini-compact process has approved 120 products with a turnaround of 60 days or less, he said. Its been “pretty easy,” and “wed like to see this duplicated on a larger scale nationally.”
The mini reflects the same purpose as that of the interstate compactto achieve uniform standards and efficient approvals.