NAII Challenges Regulators to Move Personal Lines Modernization Forward

June 17, 2002

Insurers have called on the National Association of Insurance Commissioners (NAIC) to move forward on regulatory reform, beyond operational changes and its commercial lines’ model, by working with state legislators on meaningful statutory changes for personal lines insurers.

The National Association of Independent Insurers’ (NAII) comments were made at the Improvements to State-Based Systems Working Group of the NAIC’s meeting June 8-11 in Philadelphia.

Commissioner Larry Mirel of the District of Columbia asked the industry if the progress on operational efficiencies that include an insurance department “best practices” for commercial and personal lines insurers and a model law for commercial lines hadn’t reduced the industry’s interest in pushing for a model law for modernization of personal lines.

“Although NAII and its members believe that operational efficiencies are valuable, the fact is that in states where prior approval of personal lines still exists a very restrictive statutory system will remain in spite of operational efficiencies,” Robert Zeman, NAII senior vice president of the state government affairs division, commented “True progress and regulatory modernization can only come through meaningful reforms adopted by regulators, legislators and industry officials all working together on a state-by-state basis and that would require a model law for personal lines that everyone will support.”

Zeman pointed to personal lines models adopted in the last two years by the National Conference of Insurance Legislators (NCOIL) and the American Legislative Exchange Council (ALEC) and he referred to current discussions on personal lines issues by the National Conference of State Legislators (NCSL).

“These legislative groups are moving forward on regulatory modernization for personal as well as commercial lines insurers and NAII encourages the NAIC to do the same,” Zeman said.

Commissioner Mirel responded that the NAIC would continue to examine personal lines’ issues, but that it was unlikely that a model law would be adopted anytime soon.

Zeman then recommended that the NAIC release a summary report on the lengthy hearings held last year on personal lines modernization concerns. Zeman further suggested that the NAIC should encourage all regulators to work closely with their individual state legislators on statutory improvements for personal lines’ insurers.

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