NAIC Derails Conduct Measure Fast Track
By Jim Connolly
NU Online News Service, March 11, 1:55 p.m. EST?Ignoring the urgings of their president, the National Association of Insurance Commissioners has decided against taking speedy action to adopt a model law for regulating insurers' conduct.[@@]
Rather than take up the issue at its spring meeting, which begins Saturday in New York, the group will wait till June to take final action.
Ernst Csiszar, president of the organization, based in Kansas City, Mo., had called for expedited consideration of the Market Conduct Surveillance model law, developed and adopted by the National Conference of State Legislators, Albany, N.Y. The model was adopted by NCOIL on Feb. 27.
Mr. Csiszar said the issue needed immediate action because Congress is examining how state insurance regulators handle market conduct. The issue is part of the discussion over federal regulatory options, which will be addressed by the House Financial Services Committee at a hearing March 31.
The NAIC backed away from giving the model a fast track following a conference call with the Market Regulation & Consumer Affairs "D" committee, which heard commissioners and insurers' representatives express reservations about taking rapid action.
Trade associations including the National Association of Mutual Insurance Companies, Indianapolis, the Property Casualty Insurers Association of America, Des Plaines, Ill., and the AAHP-HIAA, Washington, recommended giving the process more time.
Support for moving the model in its current form came from the American Council of Life Insurers and the American Insurance Association, both in Washington, as well as Birny Birnbaum, an NAIC-funded consumer representative and executive director of the Center for Economic Justice.
Regulators decided to send the issue to the NAIC's executive committee and plenary with the explanation that technical and substantive changes would be considered and that if consensus could not be reached by June, regulators would vote up de facto the NCOIL model.
Joel Ario, NAIC secretary-treasurer and Oregon insurance administrator, cautioned that the process would get bogged down if it was opened up again.
But 12 states recommended waiting until June, while five states supported advancing the model for possible adoption on Sunday at the NAIC's New York meeting.
State regulators' wide range of opinions on the issue ranged from concern over technical to substantive issues and even differed over what constituted a technical and substantive matter.
Regulators did express general support for seeing a model ultimately advance in the states.
Mr. Connolly is a senior editor with NU's Life-Health edition
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