In response to House Financial Services Chairman Michael Oxley's consideration of incremental industry reform - as opposed to a federal charter of government for the insurance industry - the National Association of Insurance Commissioners (NAIC; Kansas City, Mo.) recently submitted a roadmap to modernizing regulatory standards. Parts of the plan that address speed-to-market issues could minimize the technological resources needed by insurers to get products to market.
The document was created to assist Chairman Oxley and the House Financial Services Committee evaluate the modernization of state insurance regulations. In addition to addressing issues that were raised during Oxley's presentation to NAIC members at a March meeting, the NAIC's plan addresses goals put forth by the House Financial Services Committee and areas where the NAIC believes that national standards would benefit the marketplace.
Among those are issues relating to agent and company licensing as well as an anti-fraud network. The document also outlines areas in which the NAIC has already made progress toward achieving its regulatory modernization goals. "The roadmap is an evolutionary document that is subject to change," explains Jim Poolman, commissioner, North Dakota Insurance Department (Bismarck), and vice president of the NAIC. "Certain pieces of the roadmap can currently be passed by the states, if they haven't already done so." An example is the document's Interstate Insurance Product Regulations Compact.
If adopted by individual states, the compact - which enforces unified product standards and a single point of filing - will help carriers bring products to market more simply and expeditiously. "A compact acts as a legal mechanism, like a treaty between states, which enables them to act jointly," explains Terry Vaughn, insurance commissioner at the Iowa State Department of Insurance (Des Moines). Although some compacts require congressional approval, the Interstate Compact does not because the insurance industry is state regulated.