NAII Urges Legislators to Keep Regulatory Modernization Model Act ‘As Is’

March 4, 2002

The National Conference of Insurance Legislators’ (NCOIL) regulatory modernization model law is an important step in the effort to streamline state regulation and enhance a competitive insurance marketplace according to the National Association of Independent Insurers (NAII). The NAII added that proposed amendments to the model would turn back the clock on state regulation by adding more bureaucracy and costs to the system.

NCOIL’s Property/Casualty Committee is considering amendments to the model law at its Spring meeting in Charleston, S.C., which is presently running through March 3. The model, which was drafted by the NAII, was adopted by NCOIL last year.

In a letter to members of the NCOIL Property/Casualty Committee, NAII urged legislators to retain the model without the amendments suggested by agent groups. Proposed amendments include provisions regarding hearings on rate filings to further regulatory oversight of cancellation and non-renewal procedures. Each amendment increases the amount of unnecessary regulation with which companies must comply, according to NAII.

“It seems to us that the amendments are a step backward,” Robert Zeman, NAII vice president and assistant general counsel, said. “NAII and other property/casualty associations are confident that states can improve their regulatory framework. Current proposed amendments run counter to the model’s purpose of modernizing state regulation. The NCOIL model in its current form clearly brings the benefits of the competitive market as to price and product to insurance consumers. We urge committee members to retain it — as is.”

Zeman reminded NCOIL that many state legislatures have just begun sessions and that legislators need to have the time to fully consider the model law’s positive ramifications.

“Several state legislatures are indeed considering commercial and /or personal lines modernization,” Zeman commented. “Insurance departments are also examining and implementing operational efficiencies including those suggested by NAIC. All state legislatures and even regulators should have the time to consider the model on the issue of rate and form modernization and take guidance from its current and best form.”

NAII plans to testify against proposed amendments saying that they are “contrary to spirit and intent that led to the adoption of the model in the first place.”

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