Pressures On The NAICThen And Now

–A strong web of relationships has formed between state regulators and their federal counterparts in the last few years. Now, many federal representatives show up at NAIC meetings and also hold closed-door meetings with insurance departments around the country. "There is a strong relationship building program going on."

During the same session, Brian Atchinson, executive director of the Insurance Marketplace Standards Association, and formerly Maine Insurance Superintendent as well as a former NAIC president, said GLB "creates the situation where the clock's going to run out at some point for state insurance regulation."

Atchinson looked at a couple of areas–speed-to-market and market conduct–where, he said, "far too little has been done to harmonize state regulation."

Regarding speed-to-market efforts for insurance products, Atchinson said "it's a nice myth, but far from reality." The NAIC's main initiative in this area so far–the Coordinated Advertising Rate and Form Review Authority–has just been "given lip service by many states," he said.

Atchinson predicted that state deviations in the area of product approval "will continue to be an insurmountable hurdle until there is a stick to go with the carrot."

He also said that speed-to-market "will be one of the greatest benchmarks by which state regulation will be judged in the next one or two years."

Regarding market conduct, Atchinson said the "time is long overdue" for states to coordinate market conduct exams." He called the lack of consistency among the states in quality and outcome of exams "indefensible."

Henstrand said the past shows that it took a federal threat for anything to happen at the NAIC, so what is happening now is a good thing. But she added that if the NAIC can't solve speed-to-market–which she called the "poster child of the inefficiencies of state regulation"–then she doesn't "have much hope" for state regulation.

Atchinson ended by urging insurance companies to get in touch with their governors, commissioners and other state officials and tell them that "they want the state to get on board with speed-to-market and market conduct."

Reproduced from National Underwriter Life & Health/Financial Services Edition, April 29, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.