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July 19, 2010 at 08:00 PM
A National Conference of Insurance Legislators (NCOIL) panel has deferred final action on a proposed Market Conduct Annual Statement Model Act until November.
The NCOIL State-Federal Relations Committee adopted several amendments at the group’s recent meeting in Boston, and committee officials believe their market conduct annual statement (MCAS) draft is complete.
“Our legislation should provide legal certainty for collecting and handling MCAS data,” says New York state Sen. James Seward, R-Otsego, N.Y., the model sponsor and the immediate past president of NCOIL, Troy, N.Y.
But the committee plans to wait until the NCOIL annual meeting to hold a final vote on the model.
The committee deferred the final vote until November in response to requests by the National Association of Insurance Commissioners (NAIC), Kansas City, Mo., and other interested parties, officials say.
Market conduct rules are the rules that govern insurance marketing, sales and underwriting practices. Many states already require insurers to file annual statements giving information about a variety of consumer protection indicators, such as the ratio of replacement contracts issued to the total number of contracts issued, and the number of consumer complaints per 1,000 policies in force.
Consumer groups and lawyers who represent policyholders want state insurance departments to maximize public access to the market conduct information collected; insurers have argued for maximizing confidentiality, to help insurers protect details about their operations from competitors and avoid triggering frivolous lawsuits.
NCOIL began working on the MCAS model in 2009 to give regulators recommended rules for authorizing regulators to collect and share information, and to provide a framework for protecting the confidentiality of market conduct information, Seward says. The model would, for example, let state insurance commissioners share MCAS data with other entities, such as the NAIC, on a confidential basis.
