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NAIC, NCOIL and NCSL Agree on Goals, Differ on Strategies

Within the past month, the National Association of Insurance Commissioners (NAIC), National Conference of Insurance Legislators (NCOIL) and National Conference of State Legislatures (NCSL) have...
December 16, 2003

Within the past month, the National Association of Insurance Commissioners (NAIC), National Conference of Insurance Legislators (NCOIL) and National Conference of State Legislatures (NCSL) have held their respective meetings, each focusing on efforts to demonstrate why states should retain authority for regulatory oversight of insurance. These meetings follow on the heels of each organization's testimony before Congress on the same issue.

Each organization seeks to retain state oversight and recognizes the need to improve such oversight in order to avoid the federal government asserting its authority to regulate insurance at the federal level, with or without input from the states. Being legislators, NCOIL is working on a draft model bill to improve and standardize state oversight. The NAIC regulators, on the other hand, doubt the need for legislation, asserting that most state insurance commissioners and administrators have sufficient legislative authority to improve oversight. NAIC, therefore, has concentrated on revising and standardizing its market conduct examination handbook. Somewhat in the middle, NCSL has adopted a set of principles that encourages state legislators and insurance regulators to work together to improve state oversight.

Communications and interactions among the three organizations have greatly improved during the past year. But this may not be enough. NAIC commissioners were advised by Congressman Paul E. Kanjorski (D-Pennsylvania) that Congress is likely to hold hearing on a federal standards bill early next year.

What It Means to Agents: These three organizations need to come together not only on the need to fix the state system, but must also come to an agreement on how to fix it, or risk losing at least some of their regulatory authority to Congress.