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A market conduct surveillance model act is important to the National Association of Insurance Commissioners overall market conduct program and will be adopted in some form, says Joel Ario, NAIC secretary-treasurer.
Ario, the Oregon insurance administrator who is spearheading the market conduct effort, says currently there are talks to achieve consensus in a model that comes before the executive committee and potentially the plenary of the organization, based in Kansas City, Mo.
In all likelihood, the model will be adopted at the spring NAIC meeting later this month and possibly before that if consensus is reached, according to Ario.
The draft model before the executive committee is based on a model adopted by the National Conference of Insurance Legislators, Albany, N.Y., on Feb. 27. It contains changes to the NCOIL model that received significant comment from regulators, NCOIL and both life and property-casualty insurers.
Ario says all these parties are part of the discussion and that changes in the NAIC version of the model were really a clarification of points that had been left vague in order to reach consensus when NCOIL was putting the model together. The NAIC draft is an effort to drill down on those points, he explains.
For instance, he says, discussion continues over whether the model should be worded so that changes to a handbook for market conduct would be automatic when the NAIC makes changes, or whether action would have to be taken by state legislators in each state.
If no consensus is found with the current draft, one option would be to adopt the NCOIL version of the model, Ario says. However, there are changes regulators felt should be made, so there are differences with NCOILs version, he adds.
