National Association of Mutual Insurance Companies

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Commercial Form Modernization Legislation Slated for Critical Hearing

Legislation introduced by the Indiana Economic Development Corporation, the state's lead economic development agency, will help move Indiana to the forefront for state regulation modernization. NAMIC's top public policy priority is the preservation of state regulation through the adoption of regulatory modernization laws.

Under House Bill 1158, commercial insurers will only have to file their commercial form filings within 30 days of use, rather than filing them with the Department of Insurance before they can be used. This measure does not diminish the authority of the Department of Insurance, but speeds up regulatory oversight.

House Bill 1158 is authored by Democratic Rep. Craig Fry, the new insurance committee chairman. The committee's ranking minority member, Republican Rep. Mike Ripley, has also put his name on the bill. On the morning of Wednesday, Jan. 24, Fry will hear the bill before his committee.

Nationally, the Independent Insurance Agents & Brokers of America, Inc. stands with NAMIC in its opposition to a new system of federal regulation and has stated it supports "reform and modernization of state insurance regulation by making the system more uniform and streamlined" with the hammer of targeted federal legislation when necessary.

In Indiana, some agents have expressed concerns about the state moving forward on modernization.

Please contact your legislators and/or Rep. Fry and Rep. Ripley to voice your support for the HB 1158 prior to the committee hearing next Wednesday.

Below is additional information on HB 1158 provided by the Indiana Economic Development Corporation:

Q: What does commercial modernization mean?

A: Currently, Indiana insurers wait for the Department of Insurance to approve form filings before issuing a policy to an Indiana business. A form filing says what is and is not covered in an insurance policy. HB 1158 speeds up the process of bringing insurance products to business consumers. The proposal says insurers can issue a policy to a business, and then send a copy of the form to the Department of Insurance within 30 days.

Q: Why should Indiana modernize commercial (business) forms?

A: Several reasons:

  1. Regulatory efficiency: HB 1158 allows the Department of Insurance to focus its limited resources on bad actors in the industry. The Department of Insurance and others in the industry know the good and bad companies. This proposal simply allows the good companies to bring products to their customers immediately, and it allows the department to increase the focus of its limited resources on checking product filings of the bad actors.
  2. Helps Indiana insurance companies: Indiana insurance companies either formally or informally wait for product approval here before issuing the same policies in other states (some states require home-state approval first). HB 1158 allows Indiana companies to develop products quicker than companies in other states, thereby giving them a competitive advantage.
  3. Makes Indiana attractive for insurance employment: Insurance employers look at many things when deciding where to locate employees. One of the integral pieces is consistent and efficient regulation. Companies want to know that the good actors can bring products to market efficiently and that the regulator consistently keeps an eye out for the bad actors.

Q: What does HB 1158 actually do?

A: The proposal does not diminish any authority of the Department of Insurance. HB 1158 says commercial form filings are to be filed within 30 days of use rather than requiring them to be filed with the department before they can be used.

Posted: Friday, January 19, 2007 12:00:00 AM. Modified: Monday, January 22, 2007 2:03:04 PM.

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