read Read

e-mail E-mailprint Print

Accepting The Challenge: Redefining State Regulation Now

SECTION II
THE REGULATORY PRACTICES TO REDEFINE

The NAMIC survey identified eight regulatory practices that respondents viewed as priorities for redefinition. A ninth practice - market conduct examinations - was added due to the pending release of a market conduct study being done on behalf of NCOIL, and the interest of NAMIC member companies therein.

Table B summarizes the specific recommendations that NAMIC is advocating for each practice. 

Table B
SUMMARY OF RECOMMENDATIONS FOR REGULATORY PRACTICES IDENTIFIED IN NAMIC SURVEY

Regulatory Practice

NAMIC Recommendations

Producer Licensing

Supports NAIC producer licensing model, and ultimately prefers it to reciprocity approach for satisfying NARAB.
Outstanding "process" issues must be resolved, so that a strategy for uniform national standards can be implemented.

Company Licensing

Supports NAIC Accelerated Licensure Evaluation and Review Techniques (ALERT) uniform application process and urges its adoption in every state.
Supports specific timeline for adoption for review of applications.

Rate and Form Requirements

States should re-examine existing rating standards to see if reforms are politically possible.
More competitive rating standards should be promoted in each state.
Uniform national standards should be developed for specific filing procedures (i.e., transmittal forms).

Commercial Rate Deregulation

States should be encouraged to enact commercial deregulation laws that include competitive rating for all lines and buyers.

Market Conduct Examinations

Market conduct exams should focus on correcting systematic problems in insurer practices, rather than penalizing minor, inadvertent mistakes.
Debate needs to be refocused and stress "targeted" exams over routine exams and allow for self or third party audits for insurers.
Regulators should make better use of existing regulatory tools and develop more coordination among each other in scheduling and conducting exams.

Electronic Commerce Requirements

Supports more consumer education and information about electronic commerce, coupled with greater consumer responsibility for protecting their own interests.
Supports industry self-regulation and certification.

Desk Audits

State funding of solvency monitoring activities should be more systematic so company assessments are based on a reasonable formula that partially or fully funds monitoring activities, but does not exceed monitoring costs.

Financial Examinations

Regulators should consider relying more heavily on annual independent audits of insurers for data verification and a more risk-based approach to financial examinations for solvency.

Annual Statement Filings

More streamlined electronic filing of underlying data elements should be encouraged for financial reporting.
Different financial reporting requirements for single-state insurers should be examined.

In explaining the justification for these recommendations, it is probably useful to categorize each practice as either representing an "existing" or "emerging" issue.

An "existing" issue is one where certain uniformity initiatives already are underway, while discussions among regulators and the industry have not really taken place yet with an "emerging" issue.

 1 | 2 | 3