The National Conference of Insurance Legislators (NCOIL) held its Spring Meeting from March 1-4 in Savannah, Georgia. PIA National Director of State Affairs David Eppstein davidep@pianet.org represented PIA at the meetings. Here are some highlights:
On March 2, the State-Federal Relations Committee very briefly considered a proposed Resolution Concerning the Recent Use of Legal Settlements as Public Policymaking Instruments in the Insurance Arena, sponsored for discussion by Rep. Greg Wren (AL) and Rep. Rich Golick (GA). The resolution, among other things, expresses concern regarding the public policy implications of recent legal settlements with insurers and reaffirms the authority of state legislators to set insurance public policy. Because of several factors, thorough discussion of this resolution was postponed until NCOIL’s summer meeting in July.
PIA National strongly supports this resolution and voiced our support at the meeting and made it clear that we will continue to work with NCOIL and individual states to get such a resolution introduced in as many legislatures throughout the country as we can. We will work with our affiliates in each state to make sure we have a resolution tailored to your state. PIA has been working with NCOIL on this issue since June 2006 as one part of our multi-faceted action plan to address the issue of disclosure and contingency settlements’ adverse effects on the insurance marketplace.
It is crucial to PIA members’ long term interests that our state insurance legislators speak publicly about the abuses resulting from the multi-state settlement process and the inappropriate preemption of authority by some state Attorneys General and insurance commissioners. This proposed NCOIL resolution is the perfect vehicle for state legislators to affirm that the authority to implement insurance policy changes is theirs alone.
On March 1, the Insurance Legislators Foundation Board met and the main topic of their discussion was the Study on State Authority: Making a Case for Proper Insurance Oversight proposal.
The study will look at the history and nature of insurance regulation as well as issues regarding the authority of nonprofit corporations, such as the NAIC. The study will also focus on the growth of assets and information applications that permeate the present insurance regulatory environment.
The legislators agreed that the study can proceed once adequate funding is secured. If the study can begin right after the spring NCOIL meeting, a hearing can be held during the summer meeting and the study can be complete by the annual meeting this fall.
PIA supports this study to clearly define state authorities, responsibilities and assets and to help state officials clearly understand their authority to regulate the business of insurance. A study of this nature is particularly needed at this time, in the face of further threats of federal intervention in the regulation of insurance.
On March 1, the Subcommittee on Natural Disaster Insurance Legislation considered further the proposed National Association of Insurance Commissioners (NAIC) discussion paper entitled Natural Catastrophe Risk: Creating a Comprehensive National Plan, sponsored by Sen. Steven Geller (FL).
Also on March 1, the Subcommittee on Natural Disaster Insurance Legislation considered a proposed Model State Uniform Building Code, sponsored by Rep. George Keiser (ND). The model act establishes structural building requirements in order to minimize losses from wind, flood, and earthquake in areas with significant catastrophe exposure. It also creates a framework for a statewide system of building regulation. The subcommittee unanimously passed this model and it went on to pass through the full Property and Casualty Committee as well as the Executive Committee.
PIA National supports the creation of a national natural catastrophe plan and will continue to work with both NCOIL and NAIC on this issue. Further, we support strong building codes and their diligent enforcement and made our position clear at NCOIL. We look forward to working with our affiliates to craft strong building codes specifically designed for the risks posed in your state.
On March 1, the Workers’ Compensation Insurance Committee considered a proposed Model Act Regarding Professional Employer Organizations (PEOs) in Workers’ Compensation Insurance, sponsored by Committee Chair Sen. Carroll Leavell (NM). The model requires, among other things, that a PEO register with an appropriate state authority and that the experience rating of a PEO client remain with the client regardless of its relationship with the PEO. Unfortunately, Senator Leavell could not make it to this meeting so further consideration of this model will take place during the summer meeting.
PIA National supports state legislation that defines a PEO and sets forth basic rules and regulations for them to follow. We believe that such legislation will help reduce fraud in the industry. We will work with our affiliates to help their states adopt appropriate legislation to regulate this growing industry.
March 6, 2007