Mr. Ario is spearheading the Kansas City, Mo.-based NAIC's efforts to revamp the current system of market conduct regulation in state insurance departments.

"The only place where I had a quarrel, in a draft released at the start of the summer, is that the draft overstated how far regulators still had to go," said Mr. Ario.

The report was released along with a Sept. 30 letter to Rep. Michael Oxley, R-Ohio, chairman of the committee on financial services.

The report recommends that "the NAIC and the states give increased priority to identifying a common set of standards for a uniform market oversight program that includes all states.

"These standards should include procedures for conducting market analysis and coordinating market conduct examinations.

"Further, NAIC needs to establish a mechanism to encourage state legislatures and insurance departments to adopt and implement standards," it continued.

The report said that while states have market conduct regulation, "two key tools?market analysis and on-site examinations?are used inconsistently, if at all. The result is inconsistent and often spotty."

It added that "formal and rigorous market analysis" is in its "infancy among state regulators" and there is a wide array of ways examinations are performed.

The report said that "it remains uncertain whether NAIC and the states can agree on and implement a program that will result in the standardization of market conduct regulation."