GovTalk: March 3 , 2008

The National Conference of Insurance Legislators (NCOIL) addressed several important topics at its spring meeting in D.C. last week, including the use of senior designations, online producer licensing systems and the interstate compact.

NAIFA Participates in NCOIL Panel Discussion on Designations
NAIFA was part of a panel discussion on the use of senior designations during the Life Insurance and Financial Planning Committee session at the NCOIL meeting held in Washington, D.C. Gary Sanders, NAIFA Senior Counsel, represented NAIFA on the panel, which also included Karen Tyler, North Dakota Securities Administrator and current president of the North American Securities Administrators Association (NASAA), and a representative from the AARP.

In his remarks, Sanders noted that NAIFA was probably the first insurance industry group to engage in this issue when federal and state lawmakers as well as the national media began raising concerns about senior citizens being misled by agents using designations that implied a level of expertise in senior affairs that in fact does not exist.

Sanders provided information on the numerous meetings that NAIFA has had in recent months with various legislators, regulators and industry groups to discuss this issue, and he described the key elements of NAIFA’s policy on the regulation of designations. These include uniformity as part of any solution, both from state to state and across product categories; the use of an objective rather than a subjective method for determining any limits on the use of designations; and the need for front-end protection for consumers, to help them wade through the dozens of designations and certifications that are being used, as well as the back-end enforcement provided by laws that declare a misleading use to be illegal.

The NCOIL Life Insurance Committee will continue to study this issue and may begin work on a proposal in the coming months.

NAIFA Staff Contact: Gary Sanders, Senior Counsel for Law and Government Relations, gsanders@naifa.org, 703-770-8192.

NCOIL Adopts Resolution Supporting NIPR
Also discussed at the NCOIL meeting was the National Insurance Producer Registry (NIPR). The NCOIL State-Federal Relations Committee adopted a resolution in support of the NIPR. The resolution recognized that NIPR, a non-profit affiliate of the National Association of Insurance Commissioners (NAIC), is working to establish an online one-stop facility where the insurance industry can satisfy all of its licensing and appointment needs and obligations. The resolution calls on all state insurance departments to work cooperatively with NIPR with a specific goal of all states offering new and renewal licenses to nonresident agents by December 31, 2008.

NIPR is governed by a board of directors consisting of commissioners and industry representatives. NAIFA Senior Vice President Bill Anderson has a rotating position on the board and NAIFA submitted a letter to the NCOIL committee in support of the resolution.

You can read the full text of the resolution at www.ncoil.org/schedule/Forms/2008/Spring/30Day/
NationalproducerRegistryResolution.pdf

NAIFA Staff Contact: Bill Anderson, Senior Vice President, Law & Government Relations, wanderson@naifa.org, 703-770-8193.

State Officials Urge Nationwide Adoption of Interstate Compact
At its meeting last week, NCOIL approved a joint letter urging nationwide adoption of the interstate compact for insurance product approval. If approved by state groups in addition to NCOIL, the letter would be sent to state insurance commissioners and legislators in states that are not yet compact members and would be signed by the presidents of the NCOIL, the National Association of Insurance Commissioners (NAIC), the National Governors Association and the National Conference of State Legislatures.

The joint state officials’ letter highlights the benefits of the interstate compact, noting that the compact will modernize and improve state insurance regulation by increasing speed-to-market for certain insurance products and promoting efficiency and uniformity in the product approval process.

The goal of the interstate compact is to improve speed-to-market conditions for life, annuity, long-term care and disability income products. The compact allows companies to file new products for approval with one state-based entity – the compact commission – for sale in every state that enacts the compact law, rather than filing products separately state-by-state.

Thirty states have already adopted the compact, representing half of the national premium volume for the covered products. Compact legislation is also currently pending in several additional states (AL, CA, CT, DC, IL, MO, NJ, NY, SC, and WI). The compact commission is up and running and has already accepted and approved several product filings from a number of different companies in less than 60 days.

NAIFA and its state associations support the compact and have pressed for the compact’s adoption throughout the country so that innovative products satisfying high uniform standards will be available sooner for agents to offer their clients. As the leading associations representing agents selling all the products covered by the compact, NAIFA and AHIA are the only producer representatives on the compact commission’s insurance industry advisory committee.

NAIFA hopes the compact will become law in every state to make product speed-to-market a reality for all agents and their clients. NAIFA members are urged to support the compact if it is introduced in their state, and to ask their insurance commissioners and state legislators to introduce the compact if it is not yet on their legislative agenda. Hopefully, the NCOIL-sponsored state leader letter to non-compacting states will help to move the compact adoption process to its national goal.

NAIFA Staff Contact: Michael Gerber, Vice President & General Counsel, mgerber@naifa.org, 703-770-8190.

National Conference of Insurance Legislators Tackles Key Issues at Spring Meeting