The National Association of Insurance Commissioners is discussing a proposal to establish a commission that would facilitate regulatory uniformity for insurance.
As currently envisioned, the proposal would carry the threat of federal pre-emption if states do not enact the uniform standards.
According to a copy of the proposal obtained by National Underwriter, a National Insurance Supervisory Commission would be formed, with corporate governance and bylaws based on those established by the Interstate Insurance Product Regulation Commission.
States that are not members of the proposed commission-and that fail to take independent action on uniformity standards developed by the commission within a given time period-would be subject to pre-emption by a federal Office of Insurance Information.
“The relevant law or regulation of the non-compliant state will be preempted by the OII rule,” the proposal states.
The proposal was discussed by regulators during the NAIC’s quarterly meeting in June, held in Minneapolis.
In a statement, NAIC president Roger Sevigny, who is also New Hampshire Insurance Commissioner, acknowledged the proposal and said it is still being developed.
“NAIC members work continuously to improve the national system of state-based insurance regulation and further our dual goals of enhanced consumer protection and effective solvency oversight,” he said. “This proposal is still being formulated and has not been adopted by the membership. The ongoing dialogue among regulators, state government officials and interested parties will continue in the coming months.”
The proposal states that the commission would be formed through an act of Congress and would develop regulatory standards that would be implemented and enforced by the states. Topics subject to national uniformity would include:
oAsset-based product review and approval