An arm of the National Association of Insurance Commissioners has advanced a proposal to centralize the collection of market conduct data.
Members of the Market Regulation and Consumer Affairs Committee at the NAIC, Kansas City, Mo., Thursday voted 11-1, with 1 abstention, to send the proposal to the NAIC’s executive committee.
The executive committee will decide whether to send the proposal to the plenary, the body that includes all voting members of the NAIC, for final approval.
John Morrison, Montana insurance commissioner and Market Regulation Committee chair, says the proposal would:
- Collect current market conduct data through a supplement to the annual financial statement.
- Change the due date for reporting of market conduct data to May 1, from March 1.
- Make the NAIC the central repository for the data.
- Prevent the NAIC from proactively selling market conduct data unless it receives support for selling the data from its members.
- Call for continuing work on efforts to refine data elements.
- Leave open the possibility of adding more data elements in the future.
Commissioners participating in a discussion about the proposal offered overwhelming support for it.
The discussion did not include outside interested parties. Regulators said they did not need to include outside parties because they had given members of the public extensive opportunity to raise concerns both in person and by letter.
The annual statement is the most efficient vehicle for collecting data, according to NAIC President and Kansas Insurance Commissioner Sandy Praeger.
Using supplements to the annual statement to gather data will create uniformity and offer companies a chance to make a single filing rather than complying with multiple state filing requirements, Praeger said.
Filing one form rather than separate forms for 29 states makes “perfect sense,” said Jane Cline, NAIC vice president and West Virginia commissioner. “It is important not to back pedal but to move forward.”
Joel Ario, acting Pennsylvania insurance commissioner and a former Market Regulation Committee chair, oversaw initial work on the market conduct information filing issue several years ago.
Because Ohio is no longer the lead state on the issue, the NAIC needs to put a filing system in place quickly, so that there will not be any backward movement on the current work, Ario said.
When centralized market conduct data collection was first proposed as a pilot project, Ohio agreed to coordinate the project.
The state recently told other states it would step down from the role of market data collection project coordinator.
If there is backward movement, opponents of state regulation in Washington will use that to question how well state regulators are performing, Ario said.
Ario said he and other regulators would be open to hearing about specific concerns about confidentiality, but not general worries about the issue.
The information that is collected is 15 months old and therefore not likely to raise issues of competitive disadvantage, because the information is not real-time information, Ario said.
Kim Holland, Oklahoma insurance commissioner, suggested that identifying data clearly could help ameliorate insurers’ concerns about data being misinterpreted.