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NAMIC Takes Issue With NAIC Revisions to NCOIL Market Conduct Model

INDIANAPOLIS (June 16, 2004)-An official of the National Association of Mutual Insurance Companies (NAMIC) warned today that substantive changes made by state insurance regulators to the National Conference of Insurance Legislators (NCOIL) market conduct surveillance model must be addressed before NAMIC could endorse the model.

"The characterization by the NAIC that they made only 'slight revisions' to the NCOIL model is really a misnomer," NAMIC State Affairs Manager David Reddick said. "Some of the NAIC changes substantively changed the NCOIL model."

Reddick said NAMIC takes issue with at least three changes that regulators made to the NCOIL model. They include:

• Elimination of any reference to the NCOIL Self-Evaluative Privilege Model Act;
• Elimination of language that would require regulators to provide insurers with a proposed budget prior to any market conduct exam being conducted; and,
• Elimination of language that says the regulators should not focus on just identifying infrequent and unintentional random errors when conducting any market conduct exam.

"NAMIC believes each of these provisions is vitally important to protect both the confidentiality of insurer self-audits and in holding regulators accountable for the market conduct actions they take," Reddick said. "NAMIC looks forward to working again with NCOIL if they choose to re-open discussions on their model law."

Reddick added that any further discussion of the NCOIL model would now likely come in July when NCOIL will hold its national summer meeting in Chicago.

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For further information contact:
Robert Detlefsen at rdetlefsen@namic.org
or (317) 875-5250