NAIC To Adopt Market Analysis Handbook In ?04

NAIC To Adopt Market Analysis Handbook In ?04

NU Online News Service, Dec. 12, 12:32 p.m. EST?The National Association of Insurance Commissioners said it will soon be offering a "definitive source of guidance" on market analysis, designed to give advice to regulators in evaluating market and financial data.[@@]

The announcement was made following the decision by the NAIC market analysis and consumer affairs committee to adopt a "Market Analysis Handbook" this week at the organization's meeting in Anaheim, Calif. The handbook is now slated to be adopted by the full NAIC membership early next year. Once it is adopted by the full NAIC membership, the handbook will be published and made available to all state insurance departments.

This handbook, regulators said, can be "a key resource" for regulators in understanding and utilizing data to identify financial problems or market conduct issues within insurance companies. It will help regulators to use three primary sources of data to target potential market problems: consumer complaint data, relevant financial data and market share information.

NAIC stated that the handbook would include following benefits:

? It brings new rigor to the process of compiling and analyzing data to focus regulatory resources on important consumer problems.

? It allows states to collaborate more effectively through the use of common data.

? It permits the entire process to occur earlier and more rapidly, providing for earlier intervention when necessary and, ultimately, better resolution.

Joel Ario, Oregon Insurance Administrator and NAIC secretary-treasurer, who also serves as chairman of the market analysis and consumer affairs committee, commented that adopting this handbook "has been a comprehensive process that the market analysis working group started last year, and we are gratified to see it move forward toward full adoption."

Mr. Ario added, "The handbook provides states with uniform market analysis standards and procedures, which include the integration of market analysis with other regulatory functions. Our goal is to have all states implement the core checklist contained in the handbook."

The purpose of the market analysis handbook, NAIC also added, is to identify data and information that is already available to regulators and catalog specific ways that the data can be used.

This data and information, if used correctly, can assist states in identifying predictors of potential problems, assist states in using their resources better, and assist states in developing a more detailed understanding of the marketplace.

"Adoption of the market analysis handbook is one of the key steps identified under the market regulation section of the NAIC's regulatory modernization action plan, so this marks another step forward in our broader goals as well," Mr. Ario said.