Life insurers are seeking the ability to combine forms filed with the new Interstate Insurance Product Regulation Commission with traditional state product filings.
The “mix and match” concept came up here at the spring meeting of the National Association of Insurance Commissioners, Kansas City, Mo., when participants were talking about ways to encourage insurers to use the IIPRC.
The NAIC created the IIPRC in an effort to streamline insurance regulation, by creating a body that could accept product and form filings for all participating states. The commission is supposed to start accepting product filings in June.
If a life insurer already has filed a product form through the traditional state-by-state filing process, a mix and match rule would permit the insurer to use the existing product form together with related forms filed with the IIPRC.
Mix and match is necessary because it is very unlikely that the IIPRC will have a full complement of policy forms available for filing by June, according to Michael Lovendusky, who spoke for the American Council of Life Insurers, Washington.
Nebraska Insurance Director Tim Wagner asked whether mix and match would cut IIPRC filing revenue and states’ share of IIPRC filing revenue
When the NAIC created the IIPRC, regulators agreed that the new filing system should have no effect on the amount of revenue states collect in connection with product and form filings.
IIPRC Executive Director Frances Arricale noted that the mix and match concept was not envisioned when the IIPRC was created, but she said the IIPRC would consider the proposal.
Lovendusky warned that without mix and match, there will be no IIPRC filing revenue stream because no carriers will file forms with the IIPRC.
If insurers can mix and match, they will file many products with the IIPRC, and revenue will grow, Lovendusky said.
Ohio Insurance Director Mary Jo Hudson suggested that regulators could let insurers use a mix and match approach for 2 years, or for some other transition period, while waiting for the IIPRC to develop a full complement of forms.
Brendan Bridgeland, a representative for the Center for Insurance Research, Cambridge, Mass., and an NAIC funded consumer representative, backed the idea of establishing clear limits, such as a 2-year sunset clause, for mix and match.
Allowing mix and match to go on too long could undercut the IIPRC, by affecting uniformity and creating confusion about the jurisdiction of state regulators and the IIPRC, Bridgeland said.
Under current rules, if a life insurer filed a form with the IIPRC and believed a rejection was imminent, the insurer could withdraw the form and file it with a state, and no one at the IIPRC or the state insurance department would know what had happened, Bridgeland said.