NAIC Adopts Market Analysis Handbook

During a conference call this week, insurance regulators from across the country unanimously adopted the National Association of Insurance Commissioners‘ (NAIC) Market Analysis Handbook, which will be used as a tool to guide the states market analysis efforts. The regulators view the move as a major step forward in efforts to modernize and streamline the insurance regulatory process.

According to regulators, the Market Analysis Handbook will be a key resource in understanding and utilizing data in order to help identify financial problems or market conduct issues within insurance companies. The handbook outlines the use of consumer complaint data, relevant financial data and market share information in order to assist with the identification of potential market problems.

The handbook aims to bring new stringency to the process of compiling and analyzing data to focus regulatory resources on the most important consumer problems, allow states to collaborate more effectively through the use of common data and accelerate the entire process.

In addition to the adoption of the Market Analysis Handbook, NAIC members formalized a process by which a “chief market analyst” will be appointed in each state. Currently, 47 states already have appointed someone to the new post. These appointees will head up market conduct examinations and will be responsible for implementing the guidelines that are set forth in the handbook.

The Market Analysis Handbook is intended to identify data and other pertinent information that is already available to regulators and catalog specific ways that the data can be used. This data and information will assist states in identifying predictors of potential problems, assist states in using their resources better, and support states in developing a more detailed understanding of the marketplace.