The approval of a revised producer compensation disclosure model act and a resolution calling on commissioners to oppose application of Sarbanes-Oxley (SOX) financial reporting requirements on non-publicly traded insurers highlighted the March 3-6 National Conference of Insurance Legislators Spring Conference in Hilton Head, S.C.
NCOIL Chairman Craig Eiland, a member of the Texas House of Representatives, called upon his fellow legislators to take an active role in introducing and passing NCOIL regulatory reform models in their states. Citing efforts by Congress to develop federal insurance regulatory standards, Eiland stressed the importance of moving forward with effective regulatory modernization at the state level.
The Property Casualty Insurers Association of America commended the NCOIL leadership for calling on states to adopt competition-driven regulatory modernization model acts.
“PCI is pleased that Rep. Eiland has raised the battle cry with his colleagues to move beyond development of model laws to actual introduction and passage across the nation,” Robert Zeman, PCI senior vice president of insurance regulatory affairs said. “Approval in the states of adopted NCOIL models – in particular the organization’s competitive rating model – would be a significant first step toward much needed modernization.”
“NCOIL asserted itself as an organization that will play a major role in shaping the way the insurance industry is regulated in the future,” Zeman said. “The group’s actions at this meeting will form the basis of more in depth discussions on the key issues our industry faces at the March 12-15 National Association of Insurance Commissioners meeting.”
NCOIL addressed several major issues including producer compensation, application of the SOX Act, terrorism insurance, use of loss history databases, and regulatory modernization.
The legislators’ group approved a revised producer compensation disclosure model act that deletes the requirement for written consent from consumers and excludes producers whose sole compensation for the placement of business is from salaries and commissions.
“These are positive changes that we believe will serve consumers and companies well,” Zeman said.
In another positive development, the NCOIL Executive Committee approved a resolution opposing the NAIC effort to impose the financial reporting requirements of the SOX Act to non-publicly traded insurers.
“This is extremely good news, especially coming before renewed debate on this issue at the upcoming NAIC meeting,” Zeman said. “State legislators have sent a strong messages that applying SOX to non-publicly traded insurers is not necessary from a regulatory perspective and that the cost of such a requirement would far outweigh any possible benefit.”
NCOIL also agree to send a letter to members of Congress urging quick action to extend the Terrorism Risk Insurance Act. NCOIL also encouraged its members to contact federal officials stressing the importance of such an extension.
“This is an important development because it will help keep the momentum for Congress to address the terrorism insurance issue sooner rather than later,” Zeman said.
NCOIL deferred action on regulations governing the use of loss history databases until its July meeting.
Was this article valuable?
Here are more articles you may enjoy.