The National Association of Independent Insurers (NAII) is urging the National Conference of State Legislatures (NCSL) to support a model bill for the regulatory modernization of personal lines that provides a competitive use and file system with appropriate consumer safeguards.
Speaking before the NCSL Executive Committee Task Force to Streamline and Simplify Insurance Regulation, Laura Kotelman, counsel for NAII, encouraged the organization to issue a strong statement endorsing the personal lines portion of the National Conference of Insurance Legislators (NCOIL) and the American Legislative Exchange (ALEC) Property/Casualty Insurance Modernization Act.
Kotelman commented that personal lines insurance remains one of the most regulated markets in the U.S., adding that if state regulation of insurance is to thrive, the benefits of competition must be embraced and the regulatory processes modernized.
The NCOIL and ALEC model law relies on competition within the marketplace to determine rates with its use and file rating structure, but it also provides for regulatory intervention and consumer protections if a market is considered not to be competitive.
An NAII survey of regulatory best practices conducted earlier this year concluded that in many states there is a need for a public policy change that would provide a more competitive environment, with regulatory attention being more focused on solvency and market conduct issues rather than micro-management of individual insurer rates and forms.
The survey added that the reality is that insurance markets have evolved at a much faster pace than insurance regulation. There is a growing consensus regarding the need to address modernization of rate and form regulation, and the NAII is hoping that the Task Force will see the value of personal lines modernization for consumers because it results in marketplace stability, enhanced availability and more accurate cost-based pricing.