By Jim Connolly
New Orleans
A model developed by the National Conference of Insurance Legislators, Troy, N.Y., to regulate credit default swaps following the collapse of American International Group, New York, was advanced out of NCOIL’s financial services and investment product committee here during the group’s annual meeting. It will now go before the full executive committee on Sunday, Nov. 22.
During the State-Federal Relations session, a decision was made to defer any possible action on NCOIL’s development of a Market Conduct Annual Statement Act. The motion to defer was made by state Sen. James Seward, R-N.Y. and agreed to by other state legislators. Seward had sponsored the introduction of the model. The model has the support of trade groups including the American Council of Life Insurers, Washington, and the Property Casualty Insurers Association of America, Des Plaines, Ill.
The deferral will allow NCOIL’s state-federal relations committee time to review new information presented to it by the National Association of Insurance Commissioners, Kansas City, Mo.
Specifically, a proposal used and recommended by Oklahoma provides a framework for providing data to the NAIC and maintaining confidentiality. The proposal as well as the status of the work on market conduct analysis was presented to the committee by Ohio Insurance Director Mary Jo Hudson.
The Oklahoma bill requires that the market conduct annual statement be filed annually with an NAIC form and instructions on or before the last day of June; the MCAS is considered examination workpapers; the NAIC can be sent data if a confidentiality agreement is signed; a filing fee goes to the NAIC which acts as an agent of the insurance department; and the Oklahoma department receive a filing fee.
Hudson said that 29 states are participating by providing life insurance and property-casualty data and that there is a proposal for data to be gathered and held by the NAIC, a proposal that would ensure the confidentiality of data. Hudson noted that the current NCOIL MCAS model would create additional hoops that regulators would have to jump through.
Neil Alldredge, vice president-state and regulatory affairs, with the National Association of Mutual Insurance Companies, Indianapolis, said that NAMIC supports the model but also noted that the NAIC has changed its direction and does not want all data to be made public as opposed to using it for market conduct reasons.
Eric Goldberg, Associate General Counsel & Manager, State Programs, with the American Insurance Association, Washington, said that the NAIC functioning as a vendor cannot establish confidentiality provisions. There is a danger making such information public, according to Goldberg. The public does not understand such information and would “abuse” it, he added.
Birny Birnbaum, executive director for the Center for Economic Justice, Austin, Texas, spoke for the CEJ and the Consumer Federation of America, Washington, said that a statistical agent framework would keep confidentiality requirements in place. He added that there is currently very little information available for information such as non-renewals and the settlement of claims and that such information should be provided.
Seward asked whether there was a timetable on when the NAIC would initiate MCAS, to which the NAIC’s Hudson said that there still is a lot of work to be done but it could be mid-year 2010.
Rep. Virginia Milkey of Vermont said that the issue of not making information public disturbed her, particularly the inference that “consumers are too stupid to use information. That particularly bothers me. The market works when consumers have information to apply.”
Saturday, November 21, 2009
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment