Staying the course: As insurers navigate the changing regulatory environment, they have set their sights on speed-to-market rules, which are in the early stages of use and are facing growing pains in 2002. (Regulation Industry Strategies).Insurers face an urgent need to get approvals more quickly for new products and rate changes. That's what they say must happen if they are to keep up with an ever-increasing number of less constrained con·strain tr.v. con·strained, con·strain·ing, con·strains 1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force. 2. competitors. Those competitors--primarily banks--have an edge, because they have a less cumbersome cum·ber·some adj. 1. Difficult to handle because of weight or bulk. See Synonyms at heavy. 2. Troublesome or onerous. cum regulatory system. Banks have a vastly shorter timetable for getting approvals for new products, including asset-protection and retirement-savings vehicles. Because banks may operate on either a state or federal charter, they have the option of using the faster federal regulatory system when asking for rate or product approval, usually a time frame of 30 to 90 days. By contrast, life insurers, which are state regulated, frequently must wait up to 18 months for their products to be approved nationally, said Bruce Ferguson Air Marshal Bruce Reid Ferguson (DCNZM; OBE; AFC) is the Director of Government Communications Security Bureau. He took up the appointment when the previous director Dr. Warren Tucker, took up his new role as Director of Security Intelligence Service on November 1, 2006, Mr. , deputy director for the American Council of Life Insurers The American Council of Life Insurers (ACLI) is a Washington-based lobbying and trade group for the life insurance industry. ACLI represents 373 insurance companies that account for 93 percent of the U.S. life insurance industry's total assets. . "You can quickly see the competitive problems that exist and are in need of improvement," he said. Chief executive officers of life insurance companies who responded to a recent ACLI ACLI American Council of Life Insurers ACLI Associazioni Cristiane Lavoratori Italiani (Italy) ACLI American Council of Life Insurance ACLI Ada Command Language Interpretation survey identified speed to market--the ability of companies to sell products uniformly in an efficient way nationwide--as the most-needed reform. Amid renewed calls for federal regulation of insurers in the past few months, the National Association of Insurance Commissioners The National Association of Insurance Commissioners (NAIC) is an Internal Revenue Code Section 501(c)(3) non-profit organization which seeks to organize the regulatory and supervisory efforts of the various state insurance commissioners from around the United States. is fast-tracking measures it believes will streamline the state regulatory process. "The NAIC NAIC See National Association of Investors Corporation (NAIC). and the member states have made tremendous progress in the last 20 months and have brought about a sea change to about 130 years of insurance regulatory tradition," said Frank Fitzgerald Frank Dwight Fitzgerald (January 27, 1885–March 16, 1939) was an American politician. He was elected as Republican governor of Michigan to two non-consecutive terms and was the only Michigan governor to die in office. , Michigan's financial and insurance services commissioner. But the hurdles are considerable. "It's it's 1. Contraction of it is. 2. Contraction of it has. See Usage Note at its. it's it is or it has it's be ~have one thing to get 50 different commissioners to agree to one thing in one point in time and another to get 50 different state legislatures A state legislature may refer to a legislative branch or body of a political subdivision in a federal system. The following legislatures exist in the following political subdivisions:
Pressure Points The emergence of speed-to-market regulations in the late 1990s was propelled by pressure points such as the Gramm-Leach-Bliley Financial Services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. Modernization modernization Transformation of a society from a rural and agrarian condition to a secular, urban, and industrial one. It is closely linked with industrialization. As societies modernize, the individual becomes increasingly important, gradually replacing the family, Act of 1999, the efficiencies offered by technology an the influx of Internet-savvy consumers who demand real-time 1. real-time - Describes an application which requires a program to respond to stimuli within some small upper limit of response time (typically milli- or microseconds). Process control at a chemical plant is the classic example. transactions. After Congress passed Gramm-Leach-Bliley, which allowed banks to affiliate more easily with insurers and securities firms, the insurance industry faced two new realities: The inefficiency of the insurance regulatory system became apparent, and the federal government began paying closer attention to insurers. As banks began selling insurance products, such as annuities, and began navigating (networking, hypertext) navigating - Finding your way around. Often used of the Internet, particularly the World-Wide Web. A browser is a tool for navigating hypertext documents. through 50 regulators and 50 states, the flaws in the insurance regulatory system began to emerge. Life insurers say they can't develop one life insurance product and sell it nationwide without tailoring so much that they end up with a completely different product in every state in which they do business. "The costs of having a separate system for each state are a problem. Right now, companies are trying to squeeze every penny of efficiency out of their companies to be profitable and efficient," Ferguson Ferguson, city (1990 pop. 22,286), St. Louis co., E Mo., a suburb of St. Louis; inc. 1894. It is primarily residential. said. Insurers also appeared on the federal government's radar. Fearing that states would keep dragging their feet on modernization, Congress issued a deadline for the states to meet certain Gramm-Leach-Bliley requirements, such as adopting the NAIC Producer Licensing Model Act. "Congress every now and then takes a hard look at whether the regulation of insurance ought to reside at the state level," Pomeroy said. "The deadline kept the states' feet to the fire. If it [modernization of regulations] isn't is·n't Contraction of is not. isn't is not isn't be done, the ability for states to maintain ongoing regulatory jurisdiction in this area will be challenged by Congress some day." Pomeroy, who is now vice president and associate general counsel for governmental/regulatory affairs with Employers Reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. Corp., says dealing with the many entities that comprise the insurance industry made it difficult to get modernization on the fast track in the past. "We have a huge industry that has its own systems and agendas and business needs. You have 50 different state regulators, thousands of separate insurance companies in which to bring fairly complicated and costly reform initiatives to fruition fru·i·tion n. 1. Realization of something desired or worked for; accomplishment: labor finally coming to fruition. 2. Enjoyment derived from use or possession. 3. . It also takes a lot of time, money and dedication to stay until the job gets done," Pomeroy said. If Pomeroy had never been North Dakota's securities commissioner, speed-to-market insurance regulations might be on a slower track. As commissioner of securities between 1988 and 1992, Pomeroy conducted business using the department's sophisticated online regulatory system. Pomeroy recalls that during those years, prospective securities brokers submitted exams along with an application, checked 50 boxes and sent them off to one central source that stored the data. "It was so efficient. The National Association of Securities Dealers National Association of Securities Dealers (NASD) Nonprofit organization formed under the joint sponsorship of the investment bankers' conference and the SEC to comply with the Maloney Act, which provides for the regulation of the OTC market. distributes that application to the individual regulators. I could go into the system and receive a wealth of information on the applicant and, frankly, assumed the insurance regulatory system was there, too. I was surprised when I became insurance commissioner and found we were in the Dark Ages compared to what I was used to," Pomeroy said. After telling other insurance commissioners about the more efficient systems existing in other agencies, Pomeroy was selected to chair one of the initial speed-to-market committees that focused on improving the agent-licensing process nationwide. With uniform agent licensing as its first step in speed-to-market regulations, the NAIC is tackling one-stop one-stop adj. Relating to or providing a comprehensive selection of goods or services at a single location: one-stop shopping; a one-stop health-care center. filing for products, state-based uniform standards for policy form and rate filings. It also is establishing the National Insurance Producer Registry The configuration database in all 32-bit versions of Windows that contains settings for the hardware and software in the PC it is installed in. The Registry is made up of the SYSTEM.DAT and USER.DAT files. Many settings previously stored in the WIN.INI and SYSTEM. , an electronic database of information relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc insurance agents and brokers. Industry insiders agree the current crop of speed-to-market regulations are foundations to build on, and they will be tweaked See tweak. and improved as they become ingrained in·grained adj. 1. Firmly established; deep-seated: ingrained prejudice; the ingrained habits of a lifetime. 2. in the business of insurance during 2002. While the NAIC took the first steps to lay the foundations for modernization programs by creating model laws and working groups, the remaining challenge is getting 50 state legislatures and 50 insurance departments to pass and implement laws that make the regulations work. CARFRA The Coordinated Advertising Rate and Form Review Authority, one of the more complex speed-to-market initiatives, is only in a "limited launch" phase. It was created in August 2000 by the NAIC's Speed to Market Task Force. CARFRA, which has been rolled out in 10 states, provides a multistatefiling approval process. CARERA created a committee that reviews a new product and approves it on a nationwide basis within 45 days, eliminating the slow, state-by-state approval process. A filing with CARFRA is considered a filing with each of the participating states. Regulators in the limited launch states have access to the product's files online. Because life and health products lend themselves more easily to national standards, CARFRA is focusing initially on that sector and has adopted national standards on three products--term life, Medicare Medicare, national health insurance program in the United States for persons aged 65 and over and the disabled. It was established in 1965 with passage of the Social Security Amendments and is now run by the Centers for Medicare and Medicaid Services. supplement and a variable annuity Variable Annuity An insurance contract in which, at the end of the accumulation stage, the insurance company guarantees a minimum payment. The remaining income payments can vary depending on the performance of the managed portfolio. . But the CARFRA evaluation process requires states to list the regulations and laws that deviate from the national standards approved by the committee. The number of deviations vary widely. On one product, New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of listed more than 100 deviations from the national standards, said Donald Cleasby, assistant general counsel for the National Association of Independent Insurers. ACLI's Ferguson thinks the number of deviations is the chief reason that only one company--Prudential Financial--has had a product approved by CARFRA. Ferguson describes the current state of CARFRA as an important first step toward improvement to the product-approval process, because now when a company files a product with CARFRA it still must match the standards to state regulations. Although the GARFRA launch states have matching standards, the remaining states have to amend their laws and regulations to be consistent with CARFRA standards, and that hasn't happened yet, Ferguson said. Speed vs. Independence Cleasby wonders if it's a realistic goal to achieve a national one-stop rate-and-review process if individual states are still insisting on a high level of independence and deviation DEVIATION, insurance, contracts. A voluntary departure, without necessity, or any reasonable cause, from the regular and usual course of the voyage insured. 2. . "Right now, they deal with life/health products that lend themselves to national standards. What are they going to do with private passenger auto products, where every state has different laws on cancellation, nonrenewals and underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. restrictions? That's a big question with CARFRA," Cleasby said. Ferguson suggests that state legislation authorizing the insurance commissioner to accept CARFRA standards may be one way to address the state deviations. But Michigan's Fitzgerald isn't ruffled ruf·fle 1 n. 1. A strip of frilled or closely pleated fabric used for trimming or decoration. 2. A ruff on a bird. 3. a. A ruckus or fray. b. Annoyance; vexation. 4. by CARFRA's growing pains grow·ing pains pl.n. Pains in the limbs and joints of children or adolescents, frequently occurring at night and often attributed to rapid growth but arising from various unrelated causes. , and he still sees the efficacy of property/casualty products using the system. "I think it can work for them. It's the situation where you kind of go hunting where the ducks are, and that's the life and annuities side. That's why we're concentrating there for the moment. We're going in a natural progression. I don't think you begin any project at the complex part of the spectrum," Fitzgerald said. Fitzgerald said the task force he co-chairs is in the process of adding three more products to CARFRA's menu and the participation of more states. By the end of 2002, CARFRA will look the same as it does now "but have more products and states, and we'll be well down the road to demonstrating that CARFRA as a concept can work," Fitzgerald said. Regulators and industry experts agree that the speed-to-market regulations currently being used should be viewed as first steps in the right direction. "It's a work in progress and not going to happen overnight when you're talking about structural, not cosmetic cosmetic /cos·met·ic/ (koz-met´ik) 1. pertaining to cosmesis. 2. a beautifying substance or preparation. cos·met·ic n. , reform. You want to do it right, so the benefits are long lasting and not temporary," Ferguson said. The initial crop of speed-to-market regulations focuses on essentially simple goals. Each of the initiatives is at different points of application. For example, the System for Electronic Rate and Form Filing has been enacted in 50 states, while the Producer Licensing Model Act is working in just over half of the states. Electronic Filing The System for Electronic Rate and Form Filing isn't a speed-to-market product, but it gets the forms to the regulators faster via a Web-based intranet. Pomeroy recalls that as insurance commissioner he once asked his staff to walk him through a paper-based filing. He watched as the staff member stamped and recorded the company's filing, made copies and placed them in a filing cabinet. When the staff member wanted to work on the filing again he would get up and search through the filing cabinet and deal with correspondence via mail. "It was time consuming and expensive. In today's day and age, we can do better than that," Pomeroy said. After SERFF was introduced in the mid-'90s, however, Pomeroy said the insurance industry tried to kill the initiative, because it was afraid regulators could micromanage micromanage Administration A popular term for excess oversight of lower management by upper management the electronic information too easily. But SERFF re-emerged in the late 1990s. Currently, state reviewers use SERFF to facilitate the electronic management, analysis, disposition and storage of filings, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the NAIC. Insurers use SERFF to submit rate and form filings electronically to state reviewers. All 50 states are licensed to use it, and SERFF usage is growing with the NAIC reporting 2,396 filings in November 2000 and 3,663 filings in November 2001. Lee Covington, the Ohio director of insurance and chairman of the NAIC's Electronic Commerce and Regulation Working Group, said the filings average a 16-day turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. . "Ninety-four percent go through without additional correspondence between regulator regulator, n the mechanical part of a gas delivery system that controls gas pressure that allows a manageable flow of drug vapor to escape. regulator see reducing valve. and companies. In the old days, it could take a year to 18 months to do national filings," Covington said. Producer Licensing The Producer Licensing Model Act, which began in 1995, exists in 38 states. The goal of this model act is to reduce unnecessary compliance costs for insurers and allow them to deal with state regulators more efficiently. It still needs legislative approval from the remaining 12 states. The act is an effort to get all states to redesign re·de·sign tr.v. re·de·signed, re·de·sign·ing, re·de·signs To make a revision in the appearance or function of. re their agent-licensing laws and regulations so everyone is signing off the same page and doing business in a uniform fashion, Pomeroy said. While he was president of the NAIC, Pomeroy toured insurers' agent-licensing departments and remembers seeing 50 bins on a wall with 50 different sets of papers from 50 different states. "We still have the bins; we're not there yet. Change comes slowly. Thirty-eight states agreed to change or move toward a uniform framework for regulating licensing," Pomeroy said. "That's pretty significant." State-Based Systems Improvements to State-Based Systems (IS3) are NAIC recommendations pertaining per·tain intr.v. per·tained, per·tain·ing, per·tains 1. To have reference; relate: evidence that pertains to the accident. 2. to property/casualty products. Because regulations for nonlife products vary so much from state to state, national standards would be difficult to enact. So, an NAIC subgroup sub·group n. 1. A distinct group within a group; a subdivision of a group. 2. A subordinate group. 3. Mathematics A group that is a subset of a group. tr.v. decided to focus on gaining uniformity in this sector's rate and form filing. Beginning with the commercial sector, the NAIC's Improvements to State-Based Systems Working Group adopted a commercial lines modernization law for rates and forms. When enacted, it would allow commercial insurers to use a rate before filing it with state insurance commissioners, who would still have the authority to reject a rate, particularly in markets the commissioner deems noncompetitive. State legislatures still must decide to adopt the provisions this year. Another ongoing IS3 recommendation is for all states to provide filing review standards checklists on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the in the interest of increased speed and efficiency. To date, 34 states have done so. The checklists contain each state's requirements for insurance products. This is designed to make it easier for insurers to tailor A tailor is a person whose occupation is to sew menswear style jackets and the skirts or trousers that go with them. Although the term dates to the thirteenth century, tailor a submission for a new product or rate increase to each state's regulations and statutes. Challenges Typically, the larger, more densely populated pop·u·late tr.v. pop·u·lat·ed, pop·u·lat·ing, pop·u·lates 1. To supply with inhabitants, as by colonization; people. 2. states have the most politically charged and difficult regulatory environments in which to introduce products or receive rate changes, said Roger Schmelzer, vice president-regulatory affairs for the National Association of Mutual Insurance Companies. Sometimes its also a case of not rocking the boat. If regulators have laws in place that they feel are in the best interests of state residents and most people are insured, it's hard to get things to change. Regulators also are concerned that eliminating prior approval could bring about such fierce price competition that insurers' financial competency COMPETENCY, evidence. The legal fitness or ability of a witness to be heard on the trial of a cause. This term is also applied to written or other evidence which may be legally given on such trial, as, depositions, letters, account-books, and the like. 2. will be questioned. But Schmelzer points to the success evidenced in Illinois Illinois, river, United States Illinois, river, 273 mi (439 km) long, formed by the confluence of the Des Plaines and Kankakee rivers, NE Ill., and flowing SW to the Mississippi at Grafton, Ill. It is an important commercial and recreational waterway. , where insurers don't have to wait for prior approval in rates and product filings. "Illinois has had open competition on pricing since the '70s and is one of the most competitive insurance markets in the country," Schmelzer said. According to the Insurance Information Institute, in 1998 Illinois' average auto insurance bill was $667.66, compared with the national average of $704.32. Its average homeowners premium was $348, compared with the $455 national average. "Generally speaking, I'm fairly optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about the future of speed-to-market regulations. But in the end, the NAIC could have the greatest speed-to-market law in the world--and it's not binding," Schmelzer said. "The NAIC has done a superb job in focusing on the issue; now it's time It's Time was a successful political campaign run by the Australian Labor Party (ALP) under Gough Whitlam at the 1972 election in Australia. Campaigning on the perceived need for change after 23 years of conservative (Liberal Party of Australia) government, Labor put forward a to move forward to making progress in the state legislatures."
Top 10 Speed-to-Market Regulations
As the National Association of Insurance Commissioners strives to
modernize the state regulatory system, it has developed and implemented
several initiatives that use technology to make more information
available to insurers and producers and to make communication between
the industry and regulators more efficient. The following is a synopsis
of the leading initiatives.
Initiative What It Is
System for Electronic Rate and The first electronic system product
Form Filing (SERFF) filings by insurers.
Coordinated Advertising Rate and A review team that approves new
Form Review Authority (CARFRA) products on a nationwide basis.
Uniform Certificate of Authority A company licensing system that
Application (UCAA) expedites the review process of
a new state license.
Producer Licensing Model Act An initiative to get uniform
licensing laws nationwide.
Financial Data Re-Engineering The NAIC's diskette-based data-
collection process has been moved
to a Web-based application that
makes it easier and more efficeint
for insurers to tender the
required financial information
to the NAIC.
Improvements to State-Based Systems Provides insurers with a Web-based
(Operational Efficiencies) checklist of state filing review
standards for 34 states.
Improvements to State-Based Systems Uniform filing transmittal
(Operational Efficiencies) documents and uniform product
coding matrices to allow easier
tracking and cross-state
comparisons.
Improvements to State-Based Systems Streamlines the regulatory
(Regulatory Framework framework for commercial lines
Efficiencies) rate and form filings.
The National Insurance Producer Developer and implementer of the
Registry (NIPR) is a nonprofit Producer Database and Electronic
affiliate of the National Appointments/Terminations. The
Association of insurance Producer Database links
Commissioners. participating state regulatory
licensing systems into one common
respository of producer
information.
The Codification of Statutory A comprehensive guide to Statutory
Accounting Principles Accounting Principles so state
insurance regulators are able to
apply common financial analysis
tools and techniques in more
meaningful and effective ways.
Initiative Status
System for Electronic Rate and All 50 states licensed to use it.
Form Filing (SERFF)
Coordinated Advertising Rate and Launched in 10 states. A term life
Form Review Authority (CARFRA) filing by Prudential Insurance
Company of America was approved in
July 2001.
Uniform Certificate of Authority Forty-nine states and Washington,
Application (UCAA) D.C., have agreed to accept
licensing applications from UCAA.
Producer Licensing Model Act Enacted in 38 states.
Financial Data Re-Engineering Available on the Internet.
Improvements to State-Based Systems Available on the Internet.
(Operational Efficiencies)
Improvements to State-Based Systems To be implemented this year.
(Operational Efficiencies)
Improvements to State-Based Systems Adopted at 2001 NAIC Winter
(Regulatory Framework National Meeting by the
Efficiencies) Improvements to State-Based
Systems Working Group.
The National Insurance Producer Data standards will be developed
Registry (NIPR) is a nonprofit for the exchange of license
affiliate of the National application, license renewal,
Association of insurance appointment and termination
Commissioners. information.
The Codification of Statutory Has resulted in more complete
Accounting Principles disclosures and more comparable
financial statements.
Source: National Association of Insurance Commissioners
RELATED ARTICLE: Iowa Commissioner Stresses Modernization Iowa Insurance Commissioner Therese Vaughan has taken the reins reins pl.n. The kidneys, loins, or lower back. of the National Association of Insurance Commissioners during a difficult time in the industry. But despite the challenges presented by a post-Sept. 11 world, Vaughan sees regulation modernization as her top priority. In a recent interview, Vaughan expressed optimism about continuing the ongoing speed-to-market efforts, and she staunchly staunch 1 also stanch adj. staunch·er also stanch·er, staunch·est also stanch·est 1. Firm and steadfast; true. See Synonyms at faithful. 2. defended state-based insurance regulation. Q: Now that you're president of the NAIC, what are the three most important issues you would like to see worked on during your tenure? The modernization efforts; to continue to develop the strong working relationship with the regulators in other areas of financial services, federal and state securities and banking regulators; and to continue our active involvement in the international area of insurance, providing technical support to countries that are developing their regulatory systems and providing technical assistance in the trade area. Q: What would you like to see accomplished in the area of speed-to-market regulations? We have two initiatives we have been working on. The Coordinated Advertising Rate and Form Review Authority began as a pilot project in May for the centralized cen·tral·ize v. cen·tral·ized, cen·tral·iz·ing, cen·tral·iz·es v.tr. 1. To draw into or toward a center; consolidate. 2. filing of life insurance products. This year, we need to work to eliminate the deviation of state standards, to add more states and add more products. And in the area of Improvements to the State-Based Systems that deals with efficiencies at the state level and the framework for regulation at the state level, we need to look at differences across states in product requirements and focus on some of the property/casualty lines there. In the regulatory framework side, the NAIC has recently adopted a model for approval of rates and forms in the commercial lines market that is based on a market-based approach to regulation. We will be pursuing the adoption of that model in the states. Q: Which regulation that has already been passed concerning making business less cumbersome for insurers is the most effective for the industry, and why? We have initiatives under way in speed to market, producer licensing, market conduct and consumer protection. All of these have the potential to make the system more efficient. We are looking at enhanced coordination among the states and a greater uniformity than we currently have. The one initiative that is the farthest along is the producer-licensing effort. A little over a year ago, the NAIC adopted the Producer Licensing Model Act that is now adopted in 38 states. We have a vast majority of states on a centralized database and a network that will permit a centralized process for providing nonresident non·res·i·dent adj. 1. Not living in a particular place: nonresident students who commute to classes. 2. licensing to agents. We currently have six states, including New York, that are doing nonresident licensing through the centralized process. We have a number of additional states in testing, and we will see a large number of states being added this year. What that means is we are very close to having a system where an agent can complete one application and submit it electronically, and if there are no regulatory issues, such as being disciplined previously, the agent can get licensed quickly, like in 24 to 48 hours in multiple states. The producer-licensing appointment process is also important. Until recently, every state had a different appointment process, and companies had to build different systems for different appointment processes. At the October meeting, the NAIC adopted a uniform appointment process that we are all migrating toward, so all appointments can be done by the company at one time in all states. The data can be entered into the Producer Database and Electronic Appointments/Terminations that already exists. We expect all states will be on by the end of the year. The System for Electronic Rate and Form Filing allows companies to file products electronically. Instead of doing 50 different paper filings, you can compile To translate a program written in a high-level programming language into machine language. See compiler. the filings electronically and send them to the states. We've heard from both industry and regulators that this has provided tremendous efficiencies for them. One company at the last NAIC meeting reported they did a study on how SERFF had cut filing costs from $45 to $8--that's a significant tangible cost saving. We are also conducting pilot projects and testing ideas for better coordination for market-conduct exams. Q: What is your stand on federal regulation vs. state regulation of the insurance industry? There is no question that state regulation needs to be more efficient and coordinated. We are working hard at doing that, and I believe we will be successful. The idea of an optional federal charter for insurance companies is something that some people look at and say, "It worked in the banking system, why can't it work for insurance?" I think it reflects the misunderstanding of the fundamental differences between banking and insurance. One of my roles in the NAIC has been to deal with the cross-sectoral issues. I've spent a lot of time working with banking and securities regulators both domestically and internationally. If we keep in mind the purpose of regulation is consumer protection, then we need to ask, "What do consumers need to be protected from?" And in that respect, insurance is fundamentally different than banking. The problems that consumers face in the property/casualty area and in health insurance are different than the problems consumers face in banking. In insurance, the problems arise at tim es of crisis and stress. Nationally we get about a half-million consumer complaints a year, and these are from people whose child needs an operation, their house had burned down and the insurer An individual or company who, through a contractual agreement, undertakes to compensate specified losses, liability, or damages incurred by another individual. An insurer is frequently an insurance company and is also known as an underwriter. isn't paying to rebuild. These are people who need help right now. That is quite different from the world of banking, where many of the complaints that banking regulators get deal with fees that they charge. I'm convinced that the state system is the better one for consumers. Q: What do you think will happen when the NAIC moves its modernization initiatives to the state capitals in 2002 to get them implemented? Dr. Therese Vaughan became Iowa Insurance Commissioner on Aug. 1,1994, and is currently the president of the National Association of Insurance Commissioners. I am very excited about working with the legislators. There are several things coming together right now. The National Conference of Insurance Legislators is very engaged in the modernization efforts and very important to the success we've had in the producer-licensing area, where they encouraged passage of the Producer Licensing Model Act in the states. We look forward to working with them this year. The National Conference of State Legislators has created a task force to look at state regulation, so I believe they will be engaged in working on modernization efforts. I think we have the stars aligned for a good partnership with the legislators and the governors in addressing the modernization we're trying to do. Vaughan is active in financial convergence issues, international affairs Noun 1. international affairs - affairs between nations; "you can't really keep up with world affairs by watching television" world affairs affairs - transactions of professional or public interest; "news of current affairs"; "great affairs of state" and regulatory modernization efforts. As chair of the NAIC's Coordinating with Federal Regulators Working Group, Vaughan is the chief NAIC liaison with federal banking and securities regulators, and serves a key role in developing the NAIC's response to the Gramm-Leach-Bliley Act The Gramm-Leach-Bliley Act, also known as the Gramm-Leach-Bliley Financial Services Modernization Act, Pub. L. No. 106-102, 113 Stat. 1338 (November 12, 1999), is an Act of the United States Congress which repealed the Glass-Steagall Act, opening up competition . Prior to becoming insurance commissioner, Vaughan was the director of the Insurance Center and chairwoman of the Insurance Department at Drake University Drake University is a private, co-educational university located in the city of Des Moines, Iowa. The institution offers a number of undergraduate and graduate programs, as well as professional programs in law and pharmacy. in Des Moines, Iowa “Des Moines” redirects here. For other uses, see Des Moines (disambiguation). Des Moines (pronounced /dɪˈmɔɪn/ in English, . Prior to that, she was a consultant in the risk management and casualty division of Tillinghast, a Towers Perrin Towers Perrin is a global professional services firm. It was established 1 March 1934 as Towers, Perrin, Forster & Crosby. The umbrella name of Towers Perrin was adopted in 1987. Co. State vs. Federal Oversight
Oversight may refer to:
Charles Schumer Federal regulation of the insurance industry is being discussed again, this time against the backdrop Backdrop may refer to:
National Association of Independent Insurers: We stand solidly behind the state regulatory system, because it's the most responsive to the local consumer. We think it's a system that has bumps bumps a term used to describe a variety of papulonodular dermatoses in horses, including 'heat bumps', 'feed bumps', 'protein bumps', 'wheat bumps' and others. No specific disease or etiology has been assigned to the term and veterinary dermatologists wish it would disappear from use. and bruises Bruises Definition Bruises, or ecchymoses, are a discoloration and tenderness of the skin or mucous membranes due to the leakage of blood from an injured blood vessel into the tissues. Pupura refers to bruising as the result of a disease condition. but has worked well for the last 150 years. The board also recognizes that there are inefficiencies in the state regulatory system, and if modernization doesn't continue, there may be a point where the state regulatory system is in jeopardy jeopardy, in law, condition of a person charged with a crime and thus in danger of punishment. At common law a defendant could be exposed to jeopardy for the same offense only once; exposing a person twice is known as double jeopardy. . In the last two to three years, there has been a growing interest in a greater federal role in the insurance business, because banks are getting involved in insurance, foreign companies that are conducting business in this country aren't used to 50 different regulators, and commercial customers can't understand why they can't get a product now instead of six months from now. Gramm-Leach-Bliley was a precedent and another entree of the federal government into the regulation of insurance, just as ERISA See Employee Retirement Income Security Act. ERISA See Employee Retirement Income Security Act (ERISA). was in the '70s. Each time, Congress gets a little more used to the ide a of regulating insurance. American Council of Life Insurers: The need for insurers to market their products uniformly across the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. is a key issue. Right now, the process is an unwieldy and expensive way to do business. In the past, we were all in the same boat, because life insurers competed against life insurers, but now, because the competition is coming from outside the state system, it's an acute problem. The ACLI currently supports having the choice of being state or federally regulated. Because some of the ACLI members want to continue being state regulated, the council is working on two tracks. Many companies are rejecting state regulation, because many of their products are already federally regulated, such as variable annuities Variable annuities Investment contracts whose issuer pays a periodic amount linked to the investment performance of an underlying portfolio. regulated by the Securities and Exchange Commission and pension products that are overseen by the Department of Labor. Frank Fitzgerald, Michigan's financial and insurance services commissioner: In the role that I hold right now, I regulate banks, credit unions and securities for Michigan Michigan (mĭsh`ĭgən), upper midwestern state of the United States. It consists of two peninsulas thrusting into the Great Lakes and has borders with Ohio and Indiana (S), Wisconsin (W), and the Canadian province of Ontario (N,E). . So, I work closely with the federal regulators in those areas. I think that those who want a federal option don't really have a full appreciation what a federal regulator means and can do. I'm not sure they understand how intermixed the federal and the state become--the concepts are fine, but it won't come to fruition in the way they think. They are trying to pull the plug out of the bottle, thinking a genie genie: see jinni. An online information and bulletin board service that closed its doors at the end of 1999, much to the dismay of its many users, some of whom were still chatting when the plug was pulled. will emerge, but the genie that will take on a life of its own Memory Burn A Life Of Its Own was released by Noise Kontrol in 2002. Memory Burn is made up of several high profile musicians who came together to create this special work. and will not necessarily grant the wishes that they want. American Bankers Association: We back the optional federal charter, as found in the dual banking system, where an organization has the option of being either state or federally chartered. The main motivators are for the companies operating nationally and internationally in the Internet age; it's difficult to define things by state lines and to deal with 50 jurisdictions. Particularly for the larger companies, to have one set of rules and one supervisor as opposed to 50 different sets of rules and 50 supervisors and having to go to 50 different places to get approval certainly allows companies to respond to consumers in a much more rapid fashion. What makes the state system so cumbersome is it does not allow the insurance industry to respond to the consumer rapidly, because of the system of command and control that exists in the states, such as prior approval of forms and products and rate regulation. Under the federal option, there would be no preapproval of products and no ability of the federal regulators t o impose rates on the business. We think it's important to keep the optional federal regulation idea alive, because it keeps the states on their toes knowing there is an alternative out there. Seeking a Federal Charter: U.S. Sen. Charles Schumer, D-N.Y., introduced the National Insurance Chartering and Supervision Act in December. The bill calls for establishing an Office of the National Insurance Commissioner within the Treasury Department. Under the bill, all lines of insurance would fall under the national commissioner's jurisdiction, including life, health and property/casualty insurance, as well as agents and underwriters. |
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