State insurance regulators, insurers and producers celebrated the launch of the Interstate Insurance Product Regulation Commission here last week and started the business of putting the new entity into operation.
The IIPRC kick-off attracted commissioners from many of the 27 participating states.
Diane Koken, Pennsylvania insurance commissioner and former president of the National Association of Insurance Commissioners, served as the chair, and Alessandro Iuppa, the current president of the Kansas City, Mo., group, also helped preside over the inaugural session.
The IIPRC is supposed to serve as a single point of filing for life insurance, long term care insurance, disability insurance and annuity products. The NAIC and state insurance regulators created the body to implement one part of a regulatory streamlining effort. NAIC says the enactment of the interstate regulation compact is one of the efforts that points to the effectiveness and value of state insurance regulation.
“There are some who proposed to restructure insurance oversight radically and allow insurance companies to ‘opt out’ of state consumer protections in favor of an untested, industry-funded federal regulator with overlapping and redundant responsibilities,” Iuppa said.
State regulators reject that approach, Iuppa said.
The IIPRC will be housed in interim space in the NAIC’s Washington office and will remain in the Washington area, according to a motion adopted by the new commission. The motion gives IIPRC the option to change its location at a later point.
Part of the decision to locate the IIPRC in the Washington area was based on the need for visibility as well as the need to draw on a talent pool for the yet-to-be-named executive director and staff, according to discussion among commissioners participating in the interstate compact. However, some commissioners maintained that other geographic areas should be explored and that the IIPRC’s new management committee should determine where the IIPRC is based. The decision to accept interim space at NAIC headquarters was based on a need to keep initial costs down, commissioners said.
The IIPRC board will have members from 12 states. Those states include the largest six states by premium volume currently signed onto the compact. They are Texas, Pennsylvania, Ohio, North Carolina, Georgia and Virginia.
Two second-tier board seats will go to states that generate more than 2% of premiums nationally for products handled by the IIPRC. Indiana and Minnesota will hold the second-tier seats.
Finally, four zoned board seats will go to states that generate less than 2% of the premium volume for the products that the IIPRC handles. Washington will hold the seat for the West zone, Oklahoma for the Midwest zone, West Virginia for the Southeast zone and Vermont for the Northeast zone.
The IIPRC will start with legislative, industry and consumer committees. Each committee will have four members.
The National Conference of Insurance Legislators, Troy, N.Y., and the National Conference of State Legislatures, Denver, each will name two members to the legislative committee.
Insurers were asked to choose four members, and consumer advocates have submitted four nominations for the consumer committee.
During the consumer liaison session of the summer NAIC meeting, NAIC-funded consumer Birny Birnbaum urged regulators to make sure that consumers have an adequate say as the IIPRC moves into operation. He urged that sufficient money be included in the budget so that consumer advocates can participate fully in the IIPRC deliberations.