NAIC And NCOIL Declare Amity

Mr. Pickens said that "the fact theres that federal charter out there looming over our head[s] certainly has given us common ground and a sense of urgency about modernizing state insurance legislation."

The spirit of cooperation that Mr. Pickens sees is far from what used to exist, according to some long-standing members of NCOIL. One of them is Illinois state Rep. Terry Parke (R-Hoffman Estates), a past president of NCOIL.

When the NAIC came out with legislation to create accreditation standards for insurers' financial solvency, "they required every state to implement them. We resisted," said Mr. Parke.

Mr. Parke explained that "NAIC said every state had to comply with their rules and NCOIL said, No–you can give us suggestions. We didnt like the idea of being mandated. The NAIC is not a legislative body."

Susan Nolan, deputy executive director of Albany, N.Y.-based NCOIL, explained that NAIC had originally put forward a clause that if a state wasnt accredited under the NAIC model, other states would not have to accept companies domiciled in that unaccredited location.

In the early 1990s, before NAIC modified its stance, she said David J. Walsh, who was then NAIC president and Alaska insurance commissioner, had faced off over the issue with NCOIL member New York State Sen. Guy Villella, R-Bronx. The verbal slugging during a panel discussion was akin to "a boxing match," she said.

In Sen. Parkes view, the increased cooperation seen now between the two groups was a result of pressure by national insurance trade organizations "that want to nationalize" insurance.

If federalization of the industry occurs, "it will have a tremendous negative effect on the NAIC, and you wont need commissioners, and the role legislators play will be taken from us and given to the federal bureaucracy."

Sen. Parke said the NAIC and NCOIL have developed a working alliance "to try and show Congress we can modernize and streamline things so insurance companies can compete in an international market."

New York State Sen. Bill Larkin, R-New Windsor, said he noticed a big improvement in relations between the two groups when Mr. Pickens' predecessor, Commissioner Therese Vaughn of Iowa, was NAIC president.

Mr. Larkin said he had been impressed by the efforts of his home states representative on the NAIC, New York Insurance Superintendent Gregory V. Serio. Mr. Serio, he said, had been making a strong effort to work at retaining states' rights.

"If you take away the states' rights on insurance that are guaranteed by the McCarran Ferguson Act, what do you need a [state] insurance department for?" Mr. Larkin asked rhetorically.

He also wondered, "Whos going to answer to constituents when this thing goes to the feds?"

Mr. Larkin said that, in the current climate of cooperation between NCOIL and NAIC, "now we go to meetings and talk about issues and how best we can work things out."

His comments were reinforced by Mr. Pickens, who said that the NAIC "for the past three or four years" has made attendance at NCOIL and the National Conference of State Legislatures "a priority, and we have welcomed NCOIL and NCSL members at NAIC meetings."

Bob Zeman, senior vice president with the National Association of Independent Insurers in Des Plaines, Ill., has noticed the greater fraternization that has developed.

He said he had been going to NCOIL meetings since the late 1980s. Back in those days, he said, "it was pretty uncommon" to have the number of regulators on hand that now are regularly appearing at NCOIL meetings.

In Mr. Zemans view: "If theres an overriding issue galvanizing NCOIL, its the future of state regulation. Much of NCOIL activity and a good deal of their discussion relates to modernization and what can be done to stop further federal encroachment."

Reproduced from National Underwriter Edition, June 23, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.