NAIC, NCOIL, NCSL JOIN TO FIGHT FOR STATE INSURANCE REGULATION.

The National Association of Insurance Commissioners, the National Conference of Insurance Legislators and the National Conference of State Legislatures have signed a resolution agreeing to join together to fight for state insurance regulation.

"Our three groups and membership are firmly dedicated to the value of state regulation and the tremendous benefits it brings to consumers," NAIC President Mike Pickens said.

"The fact that we all are coming together to make this strong statement tells you how very important this issue is."

Pickens, the insurance commissioner of Arkansas, made his comment when the leaders of the three groups signed a joint resolution last week at NAIC's fall national meeting in Chicago.

Also signing were NCOIL President Kathleen Keenan and Donna Stone, who chairs NCSL's Financial Services Standing Committee.

The resolution said states had been successfully regulating insurance for over 150 years and lists successful reforms implements to meet requirements of the Gramm-Leach-Bliley Financial Services Modernization Act.

Pickens noted NAIC had achieved most of the major goals and objectives it had set in March 2000 to advance uniformity and reciprocity requirements of Gramm-Leach-Bliley.

To signal it planned to continue its commitment to modernize and harmonize states' insurance regulatory systems, NAIC adopted a regulatory modernization action plan called A Reinforced Commitment, outlining priorities for the next few years and plans to accomplish them.

The plan's consumer protection priorities include providing enhanced information resources for consumers, reviewing the adequacy of consumer remedies and continuing to develop and improve model laws.

The plan's market regulation reform priorities are market analysis, uniformity and interstate collaboration.

NAIC also adopted a model regulation designed to help protect senior consumers when they purchase or exchange annuity products and a proposal to streamline services of NAIC's Securities Valuation Office.

Insurers were united in their opposition to a proposal considered by NAIC's Property/Casualty Risk-Based Capital Task Force Ad Hoc Subgroup to increase the minimum level of the authorized control level of risk-based capital requirements from 50 percent to 75 percent.

The Alliance of American Insurers, American Insurance Association, National Association of Independent Insurers, National Association of Mutual Insurance Companies, Reinsurance Association of America and Physician Insurers Association of America signed a joint letter opposing the proposal.

"Although the authorized control level may ferret out a few weak companies, it will more likely impose additional financial pressures on healthy companies, forcing them to engage in uneconomical activities, with the end result being less capacity and higher costs to consumers, with fewer choices in the marketplace," they wrote.

After reviewing the letter and receiving oral testimony, Subgroup Chair Mike Boerner of Texas indicated the members would consider alternative

proposals, including a trend test that looks at risk-based capital scores over time to extract potential diagnoses of weakening financial condition.