Editor's Note: This article originally appeared inNational Underwriter, P&C.

Federal and state activity to create rules and laws for theinsurance industry has surged this year increasing demands oncarrier resources, a consulting firm said.

From January to July 2009, more than 10,000 pieces of suchlegislation were introduced, representing more than a 70 percentincrease over the period in 2008, a report by Waltham, Mass.-basedWolters Kluwer Financial Services' Insurance Compliance Solutionsgroup found.

"All this activity ratchets up the work, the resources and timespent tracking all this legislative activity" by insurers, notedDaryl James, a Wolters Kluwer product manager.

He said on average for insurers the highly manual process oftracking legislative activity and rules "takes 70-to-90 personhours a week to track and summarize," and insurers need to automatethe job to be cost-conscious and efficient.

Wolters Kluwer's study looked at state and federal statutes,regulations and administrative orders--a universe of nearly 270,000items, including individual sections of law and regulation, plusadvisory documents, such as bulletins and attorney generalopinions.

Kathy Donovan, Wolters Kluwer Financial Services seniorcompliance counsel, said while the legislation, predominantly atthe state level, dealt with health insurance and Medicare issues,there was plenty of activity on the property and casualty side.

She mentioned measures dealing with credit information use inrating and underwriting, requirements for vehicle claim settlementsand those dealing with underwriting actions such cancellations andnon-renewals.

Ms. Donovan said that much of the legislation had been broughtby insurance departments reacting to complaints about claimshandling due to the public's frequent confusion about theprocess.

With the economy in its current condition, Ms. Donovan said shesuspects it is sparking additional legislative activity becausethere has been "concern not only to make claimants whole, but toensure that the process is clearer."

According to Wolters Kluwer Financial Services' research, nearly26,000 state and federal laws and regulations pertaining to theU.S. insurance industry will change or be created this year.Additionally, about 30 percent of the regulatory activity throughJuly of this year affects all lines of insurance business.

Wolters Kluwer said costs from legislative activity can bedirect, such as increased exam activity and associated fines thatresult from non-compliance. The firm added there are also hiddencosts, including possible future lost business due to higherprofile instances of non-compliance.

The report said that for the first six months there were 169more bills in Congress on insurance than for the period lastyear.

The complete research report, "Trends and Developments inLegislative and Regulatory Activity," is online at: http://img.en25.com/Web/WKFSInsurance/TrendsAndDevelopments_6.pdf.

National Underwriter daily online news service atwww.property-casualty.com.