If the interstate compact proposal is to gain any traction and have a chance at becoming a reality, state legislators are the ones who will have to embrace it and move it forward in their legislatures.
Not surprisingly, therefore, legislators had some questions for state insurance regulators at a recent get-together to discuss the compact.
Ideally, the compact proposal developed by the National Association of Insurance Commissioners would create a single point of filing for life insurance products.
The theoretical advantages of this for life insurers are obvious. Product filings in the 50 states are maddeningly inconsistent, insurers say, and in some states it can take an inordinate amount of time to bring a new product to market. At a time when competitors in other areas of financial services can bring products to market much more quickly, insurers feel at a competitive disadvantage under the current system.
There has never been difficulty identifying the problem. The rub has always been whether the compact is the best solution.
