An official of the National Association of Mutual Insurance Companies (NAMIC) said in a statement that the “conforming amendments” that the National Conference of Insurance Legislators (NCOIL) adopted on July 16 to its market conduct surveillance model act make the model “no better off, but also no worse off” than the model originally approved last February.
NAMIC State Affairs Manager David Reddick said that while NAMIC still prefers the model’s original language, legislators should deserve credit for resisting efforts by the National Association of Insurance Commissioners (NAIC) to eliminate certain provisions. Reddick specifically mentioned the NAIC’s attempts to delete language relating to a self-evaluative privilege and a provision forcing regulators to prepare a budget for a targeted market conduct examination where the cost is billed to the company.
“These two provisions have been important to our NAMIC membership since day one in these NCOIL negotiations, and we appreciate the legislators retaining these provisions as part of this conforming amendment process,” Reddick said.
Probably the most intense negotiations among interested parties took place over Subsection 5 (d) of the model. This subsection describes the process when material changes are made to an NAIC work product.
“NAMIC wanted to retain the original provision where a hearing would be held in a state any time a material change was made to an NAIC work product,” Reddick explained. “Regulators wanted only an informational hearing. When both sides couldn’t agree, NCOIL created a third standard, so states adopting the model will now have three options to consider. This is not a particularly satisfactory solution, but it shows how badly NCOIL was willing to go to find a compromise to its model and dispense with this issue.”
Reddick also commended the NCOIL Executive Committee for adopting a resolution that says NCOIL automatically will revert to its original model language if the NAIC is unable to adopt the NCOIL amended language at its fall national meeting in September.
Oregon Insurance Administrator Joel Ario, who spearheaded the NAIC negotiations on the NCOIL model, told legislators last week that he was confident that his fellow regulators would overwhelmingly adopt the NCOIL conforming amendments.
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