NU Online News Service, Aug. 27, 3:52 p.m. EDT
The National Association of Insurance Commissioners has discussed a proposal that would establish a commission, put together by the states and authorized by federal law, to facilitate regulatory uniformity, with the threat of federal pre-emption if states do not enact the uniform standards.
According to a proposal obtained by NU Online, the National Insurance Supervisory Commission (NISC) would be formed. Its corporate governance and bylaws would be premised on those established in the Interstate Insurance Product Regulation Commission (IIPRC).
States that are not members of the proposed commission – and fail to take independent action on uniformity standards developed by the commission within a given time period – would be subject to pre-emption by a federal Office of Insurance Information (OII). "The relevant law or regulation of the non-compliant state will be preempted by the OII rule," the proposal states.
The proposal heading notes that it was discussed by regulators during the NAIC's quarterly meeting in June, which was held in Minneapolis.
A statement from NAIC President and New Hampshire Insurance Commissioner Roger Sevigny acknowledged the proposal, and said it is still being developed.
"NAIC members work continuously to improve the national system of state-based insurance regulation and further our dual goals of enhanced consumer protection and effective solvency oversight," he said.
"This proposal is still being formulated and has not been adopted by the membership. The ongoing dialogue among regulators, state government officials and interested parties will continue in the coming months," Mr. Sevigny added.
The proposal states that the commission would be formed through an act of Congress, and would develop regulatory standards that would be implemented and enforced by the states. Topics subject to national uniformity would include:
oProducer licensing.
oCompany licensing.
oAsset-based product review and approval.
oReinsurance.
oSurplus lines.
oElements of accreditation.
oReceivership.
The purpose of the commission, according to the proposal, is "to facilitate uniformity while maintaining and enhancing the consumer protections afforded by the state-based insurance regulatory system."
The commission would report to and coordinate with the OII to provide the federal government with insurance-related information, report on the development of implementing national uniformity, and provide an international insurance regulatory contact point. The OII, though, would not have a role in the development of standards or operation of the commission.
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