Alaska has started a new era by becoming the 26th state to join a new life insurance product regulatory system.
The National Association of Insurance Commissioners, Kansas City, Mo., needed to win approval for the Interstate Insurance Product Regulation Compact proposal from 26 states before it could put the compact into effect.
The NAIC has been preparing to get the compact system up and running the instant it secured approval from the 26th state. The association now is setting the wheels in motion to open the compact for business, officials say.
The NAIC is “very excited about the success of the compact and commend[s] the legislatures, governors and regulators in all the compacting states for understanding the importance of this cooperative interstate initiative,” says NAIC President Alessandro Iuppa, Maine insurance superintendent.
The compact will create an interstate commission that will develop standards for life insurance, disability insurance, long term care insurance and annuity products in the participating states.
Insurers will be able to file information about products to be sold in the participating states in one central place, and that “central point of filing” should speed up the product approval process, compact backers say.
Insurers are hoping a quicker approval process will help them compete more effectively with banks, securities brokers and mutual funds.
The compact commission will hold an organizational meeting June 13, during the NAIC’s quarterly meeting in Washington, to consider matters such as budgeting, the formation of an initial management committee and the publication of bylaws, officials say.
The American Council of Life Insurers, Washington, issued a statement welcoming the birth of the compact.
The ACLI will continue to “lobby aggressively for enactment of the compact in states where the commissioner supports it,” ACLI President Frank Keating says in the statement.
Minnesota is on track to become the 27th state to join the compact. Its lawmakers approved a compact bill earlier this week.