NAIC Gets Deadline On Accreditation Plan.

Rep. John Dingell, D-Mich., wants to know what the National Association of Insurance Commissioners is doing to improve its state accreditation program.

In response to the General Accounting Office's report in August on improving the accreditation program, Dingell said he wants a written explanation with specifics on how and when the NAIC will respond to each of the recommendations made by the GAO-Congress' investigative arm.

In an Oct. 2 letter to Kathleen Sebelius, Kansas insurance commissioner and NAIC president, Dingell questioned the reaccreditation of the Tennessee insurance department, which lost its accreditation for a short period following the fraud allegedly committed by Martin Frankel.

Tennessee regulators twice audited an insurance company controlled by former bond trader Frankel, and both times failed to see the companies had no assets, Dingell wrote. The GAO's report points out NAIC instructions require state insurance departments to demonstrate to the review team that they can identify potentially troubled insurers in a timely manner and begin appropriate actions.

The GAO report called for the NAIC to strengthen its focus on chartering and change of ownership; begin new on-site review team procedures, such as requiring all relevant exam information since the last accreditation review to be included in a current review; develop a scoring methodology that puts more emphasis on solvency standards, and make sure the onsite review team has the flexibility to spend more time on reviews when needed.