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Life Health > Life Insurance

Commission OKs 'Mix and Match'

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States on the management committee of the Interstate Insurance Product Regulation Commission voted to adopt product standards and to create a 2-year transition period that would allow the ‘mix and match’ of compact product standards and state requirements.

The decision on a proposal developed by Ohio and Vermont was adopted by a vote of 9-1 with 1 abstention.

The standards include individual current assumption whole life, individual modified single premium variable life, and individual modified single premium joint first-to-die variable life insurance policy standards.

Further revisions to the product filing rule would require that all state filing fees are paid and would create an appendix listing product lines and uniform standards that will be used to determine when mix and match will end for a product line. It will be developed within 6 months of the effective date of the product filing rule. Revisions would also allow mix and match for any insurance/annuity contract in effect as of an applicable product line sunset date to continue indefinitely.

The vote followed a motion made by Pennsylvania to defer any action until a legal analysis is completed. The rationale for the motion was that it would be difficult for a commissioner to disapprove a mix and match filing because it would be under the commission’s jurisdiction. Pennsylvania said there could only be action taken on a fee-based form and not on a compact-based form. That motion was defeated 10-2, with Pennsylvania and Washington state dissenting.

Pennsylvania said it was difficult convincing its legislature to adopt compact legislation, and “we don’t want to be put in a position to explain to the legislature whether it [this issue] would reduce consumer protection and cede more authority to the compact.” The comments were seconded by the state of Washington.

However, Michael Lovendusky, vice president and associate general counsel with the American Council of Life Insurers, Washington, said there are sufficient protections within the commission by-laws to afford states the ability to make their own determinations when necessary.

States including Ohio, Vermont and Virginia said they would oppose the motion for reasons including an opinion that the language in the commission product filing rules and by-laws would give them the authority to take action, the recognition of the need for a transition so that more companies would be moved to file, and the concern that a review would delay the commission from being able to accept product filings.

Brendan Bridgeland, a NAIC funded consumer with the Center for Insurance Research, Cambridge, Mass., said the Pennsylvania suggestion was a good one and should be considered.


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