Five models passed muster to be considered for full model status in a new policy initiated by the National Association of Insurance Commissioners during its summer meeting here.
Among the models that will advance are: the Military Sales Practices model regulation; amendments to the Viatical Settlements model act; the Medical Malpractice Closed Claim Reporting model law; changes to the Long Term Care Insurance model act, which includes producer training requirements; and the Uniform Health Carrier External Review model act.
The models advanced during an executive committee session, which was convened to decide solely on whether the models should continue to have model status or not.
Under a new NAIC policy initiated by Walter Bell, NAIC president and Alabama insurance commissioner, work in development has to come before the executive committee to decide whether a draft should be considered a model law that would be advanced for uniform adoption and receive a commitment to adopt the model, or whether it would be considered a guideline that would not be advanced as a model but would still be considered important guidance.
In making his case for consideration of the Military Sales Practices draft as a model, Georgia Insurance Commissioner John Oxendine said it met a national standard, and was a topic of national importance. The model seeks to make sure that military service people are not inappropriately sold insurance contracts.
“This is important legislation and regulation for military folks,” said Sandy Praeger, NAIC president-elect and Kansas insurance commissioner.
Kentucky Insurance Director Julie McPeak said the Viatical Settlement model met the criteria of uniform adoption with 35 states already having some version of the model in place, and already had significant resources devoted to its development. McPeak acknowledged there were different positions on the merits of the model. However, she said that components, such as its attempt to address the issue of stranger-owned life insurance, made it worthy of adoption.
She said that whether or not the model should be adopted on its merits could be discussed during the joint executive/plenary session. It was later adopted.
Two models, the Standard Nonforfeiture Law for Life Insurance and the Standard Valuation model law, were deferred by the executive committee. The reason, according to McPeak, is that these models are going to be part of a broader framework created by the principles-based working group.
Thomas Hampton, commissioner of the District of Columbia and chair of the principles-based working group, explained that his group is creating a framework to incorporate the work of the Life & Health Actuarial Task Force, the Capital Adequacy Task Force, the Statutory Accounting Principles working group and other groups that are working on making principles-based reserving a standard. Consequently, he said, he did not want the 2 drafts considered for model status because a new 1-year requirement to complete work would start when the vote was taken to consider them as models. He said he wants to take all the work of these different NAIC groups, compile them, and then when the project is ready, present them to his parent executive committee.