With technology playing an increasingly important role in the modernization and standardization of the 50-state system of insurance regulation, officials from the National Association of Insurance Commissioners have decided the time is ripe for development of standards that can make the process more seamless.The National Technical Architecture working group started work early this year on standards that will be mandatory for information projects developed directly for the Kansas City, Mo.-based NAIC, and serve as a guide for state and industry efforts that target national regulatory interoperability.

James Winningham, the chief information officer for the Arkansas Department of Insurance and chairman of the NAIC's National Technical Architecture working group, says he hopes to have the standards in place by the beginning of next year-but was reluctant to be committed to any particular timetable.

As consumer groups, state and federal lawmakers and regulators have spent the past three years debating how to develop a uniform and efficient state-based regulatory system, several technology initiatives have also taken shape to facilitate the process.

National data exchange systems set up through the NAIC-with cooperation from state insurance departments-now support electronic rate and form product filings, company licensing applications and producer licensing.

Meeting in Atlanta March 9 during the NAIC's Spring National Meeting, Winningham said the standard-setting process has not kept up with the changes.

National architecture

"The objective is to manage the national architecture as a whole so we don't have one group working with one kind of architecture, and another group working with another kind of architecture. The idea is to promote interoperability," he explains.

But it won't be accomplished with a sledgehammer.

"No one is going to go to a state and say, 'We are forcing you to observe the standards.' But to interoperate with the national regulatory system it would need to observe whatever standards are in place," Winningham says.

Up to now, different sets of specifications have governed interoperability.

"For example, with the Producer Information Network (PIN), if a state accepts PIN transactions, that means the state has observed the specifications for PIN," Winningham explains.

"Instead of having a set of standards for interoperating with PIN, we want to have a set of standards for interoperating with any of the NAIC systems," he says.

Steve Tuckey is a New York-based editor for Insurance Chronicle, a Thomson Media publication.

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