The country’s major property-casualty trade associations announced their support for efforts by the National Conference of Insurance Legislators (NCOIL) to develop a model state law on market
The Alliance of American Insurers, American Insurance Association, National Association of Independent Insurers and National Association of Mutual Insurance Companies are advocating that NCOIL proceed with model legislation that includes some of the market conduct reforms that the National Association of Insurance Commissioners (NAIC) has developed. These include market conduct analysis, state coordination and uniformity in procedures. A model law from NCOIL including these three areas would go a long way toward solving many of the problems plaguing the current market conduct system.
In a recent letter to NCOIL officials, the trades urged the organization to develop a model act that requires all states to do the following:
*submit all consumer complaint data to the NAIC’s Consumer Complaints Database (CDS) in accordance with the uniform complaint recording form;
*report all examinations to the Examination Tracking System (ETS) and to maintain the current status of those exams on ETS; and
*follow, without exception, the uniform examination procedures in the NAIC Uniformity Outline.
In addition, the four trades reportedly wholeheartedly agree with one of the major findings of NCOIL’s recent market conduct study, which stated that:
“The purpose of market conduct regulation, and particularly examinations, should be to prevent and remedy unfair trade practices that have a substantial adverse impact on consumers, policyholders and claimants. Resources should not be wasted on detecting and correcting minor processing errors or inadvertent minor violations of the laws and regulations. Regulators should pursue substantive abuses and take actions that will result in the mitigation of the greatest harm and restoration of the greatest benefit to consumers and the public.”
In their letter, the trade groups urged that, “this will be a primary focus of the NCOIL model legislation and that these principles be incorporated throughout the bill.”
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