LAS VEGAS--Key legislators at the National Conference of Insurance Legislators meeting here said a study that recommends channeling some monies that now go to the National Association of Insurance Commissioners, to NCOIL, makes sense.

The study, "Study on State Authority: Making a Case for Proper Insurance Oversight," and the proposal will receive a full review when it is discussed during a special executive committee board hearing.

State Rep. George Keiser, R-Bismarck, N.D., notes, "Certainly, the funding level of NCOIL is very limited." If an opportunity arises that would result in "a direct and positive benefit in the development of good insurance policy, then it is an option that should be explored."

But he cautioned there could be a difficulty "developing a mechanism that makes it possible to redirect state premium assessments."

The funds involved are state premium assessments, which are estimated to constitute about 4 percent of the NAIC budget- the bulk of the NAIC funding coming from fees and other sources.

Rep. Brian Kennedy, D-Hopkinton, R.I. said the money involved, when compared with the total NAIC budget, suggest that it would not have a material impact on the operations of the Kansas City, Mo.-based organization. "The goal is to maintain state-based regulation and it seems that this would just make good sense," he added.

Mr. Kennedy said that he does not believe that the line item in state budgets is specific to any organization but, rather is a general, discretionary line item.

The study also addresses the issue of open meetings, which has been important to Mr. Kennedy. He said that progress between the NAIC and NCOIL on the issue is being made.

He noted that the second liaison meeting between legislators and regulators will be held on Dec. 2 at the winter NAIC meeting in Houston. But, he added, he wants to continue efforts to open up meetings held by NAIC-related organizations, such as the System for Electronic Rate and Form Filing.

The income from state premium assessments is probably more important to NCOIL than to the NAIC, given the size of the NAIC budget, according to state Rep. Robert Damron, D-Nicholasville, Ky.

But, he said, the challenge could be making a change in state legislatures that would make it possible for these funds to be redirected.

The recommendations are included in the second part of the study which has been under development for more than a year.

The proposal is derived from one of 6 recommendations included in the study. These include:

o Increase NCOIL funding resources and membership.

o Clarify regulatory roles; enhancing insurance regulators' authority by restoring agencies' stature.

o Increase legislative oversight of insurance regulation.

o Open NAIC meetings.

o Consider strengthening state insurance regulation through expansion of the interstate compact.

o Support an independent commission of stakeholders in considering how state insurance regulation can be further strengthened.

The proposed resolution to reallocate state assessments says that the NAIC annually assesses each member state a fee based on the volume of a particular member state's insurance premiums to the total premium volume of all member states.

In aggregate that amount totaled: $1,917,841 in 2005; $1,968,635 in 2006; a projected $2,015,610 in 2007; and, a budgeted $2,063,932 in 2008.

Special Reports /

Lawmakers: Taking Some NAIC Cash Away Makes Sense

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