PICKENS PROMOTES NAIC PLAN:

Arkansas Insurance Commissioner Mike Pickens told members of the House Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises that regulating insurance is a function of the states, a system that has served consumers effectively and efficiently for 125 years. Pickens, president of the National Association of Insurance Commissioners, presented the NAIC’s recently adopted action plan, “A Reinforced Commitment: Insurance Regulatory Modernization Action Plan,” as the blueprint for the future of state insurance regulation. Unanimously adopted by its members at the 2003 NAIC Fall National Meeting, the plan sets forth comprehensive, time-sensitive principles and goals that address consumer protection, market regulation, “speed-to-market” for insurance products, producer licensing, insurance company licensing, solvency regulation and change in insurance company control. It calls for states to reach all key modernization goals between Dec. 31, 2003 and Dec. 31, 2008. In recent years, certain Congressional proposals have advocated federal insurance regulation, however, federal oversight is not what insurers and consumers want or need, Pickens explained. “Ultimately, a federal charter and its regulatory system would result in at least two separate insurance systems operating in each state,” he said. Pickens also pointed out that federal oversight is unnecessary, given recent accomplishments by state regulators. For example: 49 states have now adopted the NAIC’s Producer Licensing Model Act; 39 states have implemented state licensing reciprocity; a System for Electronic Rate and Form Filing (SERFF) has been created, which has resulted in an 88 percent increase in electronic filings in 2003 over 2002, with an average turnaround time nationally of only 17 days; and, regarding market conduct, 42 states currently certify compliance with two or more critical insurance company exam areas, such as scheduling, pre-exam planning, company procedures and reports. The NAIC noted that its modernization initiatives are supported by the National Conference of State Legislatures, the National Conference of Insurance Legislators and the Council of State Governments.

Topics Legislation