Insurers were pleased as the National Association of Insurance Commissioners (NAIC) adopted its Commercial Lines Rate and Form Model Act at its Executive Committee meeting during the Spring Meeting in Reno this week.
The National Association of Independent Insurers (NAII) in a letter to the NAIC said that “the adoption of the model law would be a clear step forward in the effort toward modernization and preservation of state regulation of the business of insurance.”
“The model is not perfect, and as with most models, it should be refined by state legislatures to fit the nuances of their respected jurisdictions,” NAII’s Senior Vice President and Assistant General Counsel Robert Zeman, said.
The NAIC did not adopt a personal lines model on rates and forms, however, the NAII expects that regulators may look more closely at this issue over the next year.
On the issue of personal lines, the NAIC’s Insurance Systems 3 Committee discussed different avenues for determining best practices for states to use when receiving rate and form filings from companies. The Working Group specifically cited the NAII member survey as one tool for determining best practices.
The NAIC took several actions on market conduct issues:
The NAIC’s Self-Critical Analysis Working Group delayed passage of its guiding principles until the Summer NAIC Meeting. The NAII supported the principles that permit confidentiality, allowing insurers to avoid or minimize both administrative sanctions and private litigation while conducting frank, honest reviews of their compliance programs. Cleasby said the working group wanted to accept additional comments on the principles before adoption at the summer meeting.
On state-based system improvements, the NAIC has created four new sub-groups: The Review Standards Checklist Subgroup will ask state insurance departments to review and standardize a check list of improvements for streamlining filings; the Property and Casualty Uniformity Subgroup will look at homeowners insurance policies to see if there is a way create more standardization of policies from state to state; the Systems Electronic Rate and Form Filing Subgroup (SERFF) will find ways to encourage more states to join the SERFF database for filings to insurance departments and ways to make it more attractive and feasible for companies to sign on; and the Filing Submissions Uniformity/Metrics Subgroup will review whether states are actually achieving regulatory modernization.
“It is unclear at this time how these subgroups will go forward and the time frame involved,” Cleasby commented. “The NAIC’s goal that would require insurance departments to review rate and form filings within 60-day timeframe as part of regulatory modernization and streamlining also remained a priority as well.”
In other action, the NAIC’s Consumer Protection Committee voted to include all complaints against insurance companies on their Consumer Information Source (CIS) Web site, but agreed to refer to the Database Subgroup a decision about whether complaints would be listed under indices with titles such as “justified complaints or unjustified complaints.”
According to Cleasby, this group also agreed it will post two years of a company’s complaints on the Web site but will caution consumers that each state has variations in the way complaints are collected so there may be variances from the NAIC’s site and the state insurance department Web site.
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