WASHINGTON–State insurance legislators on Friday deferred actionon a proposed Market Conduct Annual Statement Model Act, in hopesof working with state regulators on a joint approach leading tonational uniformity for state producer licensing laws andrules.

Insurance legislators at the spring meeting of the NationalConference of Insurance Legislators (NCOIL) made the decision aftera chorus of representatives of life and property-casualty insuranceproducers outlined a plethora of concerns with the currentsystem.

The state legislators acted despite strong industry concernswith a competing model law proposed by the National Association ofInsurance Commissioners that would allow that group to create acentral registry, where information about state actions againstagents could be obtained for a fee.

The provision in the NCOIL model act they support over the NAICmodel requires that market conduct annual statement (MCAS) data andanalysis be kept confidential and privileged.

It also establishes a system whereby state insurancecommissioners can collect, analyze and share MCAS data with otherentities, including the NAIC.

Concerns voiced by agent groups were supported byrepresentatives of p-c and life insurance carriers and tradegroups, who use both the independent and captive agent models todistribute their products.

Producer groups voicing concerns about the current system at theNCOIL meeting included representatives of the Independent InsuranceAgents and Brokers of America, the National Association ofProfessional Insurance Agents, and the National Association ofInsurance and Financial Advisors.

Wes Bissett, a senior vice president of the IIABA for stateaffairs, warned about the urgency of the situation.

“Our inability to address this will add incentives for federalregulation,” he told the legislators, noting that while thetechnology exists for uniform standards, there is a lack of truereciprocity, as well as duplicative licensing requirements in eachstate in which an agent does business.

He also said it would be “counterproductive” for NCOIL to haveone licensing model while the NAIC has a separate one.

Speaking about the disparity in fingerprinting requirements,even though the technology exists to make them uniform, DavidEpstein of PIA said the majority of its members are licensed tosell insurance in more than one state.

“Any system that would require fingerprints from both residentand nonresident applicants would be extremely burdensome andcostly,” he said. “Therefore, a secure method for sharing thisinformation amongst our regulators is essential.”

William Anderson, a National Association of Insurance andFinancial Advisors (NAIFA) vice president, voiced support duringthe debate for federal legislation recreating the NationalAssociation of Registered Agents and Brokers. That legislation wasintroduced in the last Congress and passed the House in lateSeptember. But there was no companion bill in the Senate.

The battle over competing models was prompted by the NAIC'sdecision to move ahead with a transition plan that would ultimatelycentralize MCAS date at NAIC offices in Kansas City, Miss.

Deirdre Manna, vice president of industry and regulatory affairsat the Property Casualty Insurers Association of America, told theNCOIL legislators of PCI's concerns with the NAICinitiative–explaining why PCI supported the NCOIL model as proposedby Sen. James Seward of New York.

“Throughout the process, the insurance industry expressed twomajor concerns with the initiative,” Ms. Manna said. “We havealways questioned whether a state insurance regulator has authorityto turn over the market conduct information it receives frominsurers to the NAIC.”

Second, she said, “we remain concerned with the NAIC's abilityand willingness to maintain certain information as confidential,”adding, “Some of the information the NAIC wants to collect issensitive and confidential in nature.”

The NCOIL model responds to industry concerns regarding NAICauthority to collect market conduct data, she said.