The National Association of Insurance Commissioners (NAIC), Kansas City, Mo., has submitted a detailed framework document to House Financial Services Chairman Michael Oxley, delineating several ongoing and proposed steps to create an effective, state-based national system of insurance regulation."We have been asked by Chairman Oxley to directly assist in the committees process of evaluating the modernization of state insurance regulation, and we have pledged our time and our full resources to move the regulatory process forward in a manner that benefits consumers and the industry," says Ernst Csiszar, NAIC president and South Carolina director of insurance.
The NAICs roadmap document covers 15 areas where national standards can be effectively implemented, while it notes that diversity is a strength of the state regulatory system, which in certain cases requires the recognition of differing local market conditions. The issues are based on those raised during Oxleys presentation to NAIC members in March, along with other conceptual goals put forth by the committee, and additional areas where the NAIC believes that national standards would be beneficial to the marketplace.
Areas addressed include:
- Market Conduct Uniform Standards
- Company Licensing
- Agent Licensing
- Life Insurance
- Property/casualty Commercial Insurance
- Property/casualty Personal Lines
- Surplus Lines
- Antifraud Network
- McCarran-Ferguson Antitrust Exemption and Rate Regulation
- State-National Insurance Coordination Partnership
- Interstate Compact for Health Insurance Processes
- Enhancing Financial Surveillance
Several areas focus on progress already being made at the state level, such as the use of nationally coordinated systems. Market conduct, for example, centers on the five steps of centralized data collection, structured and uniform market analysis, uniform examination procedures, interstate collaboration and a broader continuum of responses to address business practices, such as targeted examinations. In the case of state-national coordination, the document cautions against too much federal intervention, and cites ongoing progress at the state level.
"It is quite clear, and has been acknowledged by Chairman Oxley, that the states have the tools and mechanisms needed to continue implementing regulatory reform," says Serio. "The NAIC roadmap provides a navigational tool for the future, and illustrates why the ongoing reform process is best left to the states, in partnership with Congress."
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