Members of the National Association of Insurance Commissioners (NAIC) were reportedly less than enthusiastic when they learned that the National Conference of Insurance Legislators (NCOIL) planned to adopt a market conduct model. However, NAIC leaders encouraged open and meaningful dialogue with NCOIL leaders as both organizations strive for market conduct reform.
“NAII supports the NCOIL market conduct model concept because it will fast forward much needed reform efforts by passage of concrete state laws that cannot be altered,” said Don Cleasby, NAII assistant general counsel and assistant vice president. “The NAIC has done an outstanding job of addressing specific issues on market conduct such as more uniformity in market conduct examinations procedures. NAIC’s market analysis handbook and its programs to target market conduct examinations better also help regulators and companies. NAII also strongly supports regulators and legislators working more closely together because it will avoid duplicative efforts and hopefully produce uniform reform, which is the best way to avoid any federal oversight of this issue.”
Discussion of the NCOIL model took place after a presentation was made to the NAIC Executive and Plenary Committee earlier this week. NCOIL representatives explained that PricewaterhouseCoopers (PWHC) did an analysis for NCOIL on the current state regulatory system for market conduct that identified areas where the system could be improved. NCOIL hopes to incorporate PWHC’s recommendations in a model by November of this year.
In other market conduct related action, a resolution was adopted by the NAIC to amend the Market Conduct Record Retention and Production Model Regulation so that any anticipated data sought during a market conduct examination must be requested of the insurer 30 days in advance.
Current model language would require production of this data with five business days of a regulator’s request (although a regulator could grant an extension). “NAII supported this amendment and believes it is a more reasonable and justified approach to providing data,” added Cleasby.
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