New York Finally Gets NAIC Accreditation

NU Online News Service, Sept. 8, 12:04 p.m. EDT

The New York State Insurance Department has finally been accredited by the National Association of Insurance Commissioners' after operating for 19 years without the NAIC imprimatur.

At the NAIC's Fall National Meeting in National Harbor, Md., the state was finally recognized for meeting the requirements of the organization's Financial Regulations Standards and Accreditation Program. The NAIC standards were approved in 1989 and the first states were accredited in 1990,

"The accreditation program is the cornerstone of solvency regulation, and it helps keep us accountable to one another," said Roger Sevigny, NAIC President and New Hampshire Insurance Commissioner. "By obtaining accreditation, New York has demonstrated its continued commitment to the NAIC and state-based financial solvency regulation."

Action to secure accreditation for the state was commenced by former New York Insurance Superintendent Eric Dinallo, who said in February that he expected it would come through this year.

Mr. Dinallo said then that a key reason why New York, unlike most states, had not been accredited by the NAIC was because until last year it lacked a statute regulating risk-based capital. Now that such a law has been passed, New York will get accreditation done in 2009, "assuming the NAIC finds us adequate," he predicted.

NAIC accreditation of a state means it meets the organization's standards for setting insurer solvency rules, along with a variety of other requirements. The accreditation program is an attempt by the NAIC to establish national uniformity in insurance oversight, and New York's lack of accreditation has long been seen as undermining that goal, at least in terms of perception.

"State insurance regulators share a common commitment to policyholder protection through solvency regulation," said Mr. Dinallo's successor, New York Insurance Superintendent James J. Wrynn. "New York's decision to seek accreditation underlines that commitment."

Accredited insurance departments are required to undergo a comprehensive review by an independent review team every five years to ensure the departments continue to meet baseline financial solvency oversight standards.

The accreditation standards require state insurance departments to have adequate statutory and administrative authority to regulate an insurer's corporate and financial affairs, and that they have the necessary resources to carry out that authority.