State insurance commissioners say 2006 will be the year of big resolutions.
Alessandro Iuppa, the new president of the National Association of Insurance Commissioners and Maine insurance superintendent, named three major initiatives during the recent winter meeting of the organization, based in Kansas City, Mo.
Iuppa cites as top priorities going into the new year: making the Interstate Compact fully operational, continuing efforts to challenge federal oversight of insurance that is being advanced in Washington and creating a plan for disaster preparedness.
With the recent addition of Pennsylvania to states that will participate in the compact, the NAIC has 20 of the 26 states needed to make the entity come to life. To become operational, the compact needs either 26 states to sign on or states representing 40% of national premium.
Another issue that several commissioners cited and that threaded its way through a number of sessions during the winter meeting was addressing the growing problem of providing affordable health care.
Sandy Praeger, NAIC vice president and Kansas commissioner, says the compact is still “front and center.” But she notes that “people are concerned about the cost of health care.” She says this cost is what is driving up premiums the public pays.
Praeger says that if the system of state regulation can be streamlined so that competitive new products can be brought to market more quickly, then that will be a concrete way regulators can help alleviate health care costs.
State regulation can meet consumers’ needs better than an optional federal charter, which she says NAIC continues to oppose.
For example, she cites questions and complaints insurance departments are receiving about the new Medicare prescription drug plans now available.
The plans are being regulated at the federal level, but “in reality, we will be the ones that consumers will be calling.”
Joel Ario, Oregon insurance administrator, cites health insurance as a major issue both at NAIC and in Oregon.
The issue was raised during the commissioners’ roundtable at the winter meeting, he says, and commissioners will be urging Congress to address the issues of access and affordability.
The role of state insurance departments ranges from improving access and affordability in both the individual and small group market to making health care costs more transparent, he says. That transparency centers on making information on the cost of procedures more available, Ario continues. Currently, “it is very difficult to get comparative information from hospitals.” Hospitals depend on payors, he says. “That opaqueness needs to be opened up.”
Jorge Gomez, Wisconsin commissioner, says his department is receiving complaints about the new PDP program. But, he adds that dialogue between NAIC and representatives of the Center for Medicare & Medicaid Services is a positive. Among the issues that are arising and will have to be monitored in 2006 is cross-selling of PDPs with other products, he continues.
On the issue of long term care, good dialogue is taking place on work to revise the LTC model regulation, he says.
Among the issues in which further discussion will be needed in the coming year, he says, are points on incontestability and underwriting.
Another issue that will come up in 2006, Gomez says, is selling annuities to seniors.
Jim Poolman, North Dakota insurance commissioner, also cites an examination of the suitability of annuity products as an area regulators will be interested in during 2006.
Poolman cites concern about indexed annuities both because it is a growing market and because the product is complex.
Other issues regulators plan to continue looking at are investor-owned life insurance and premium financing, he says.
Poolman says another major focus is the effort to create a principle-based approach for reserving.