Before it secured committee approval, state legislators dealt with four issues. A provision that would have required chief executive officers of insurance companies to certify that there are appropriate market conduct procedures in place was removed from the model, as was a provision that would have included an arbitration process if an insurer was dissatisfied with the outcome of a market conduct examination.

The issue of restitution was not included in the model, and language that referenced work products, including model laws and regulations developed by the National Association of Insurance Commissioers, Kansas City, Mo. was left in the model.

Tim Tucker, NCOIL's director of state-federal affairs, said that the next setp for NCOIL, based in Albany, N.Y., will be to educate lelgislators about why the model should be adopted. He said Nebraska has introduced the model and held a hearing, and will advance the model, in its latest form, before its legislature. Other states could conceivably introduct the model in this legislative session, he said.

At Thursday's session of NCOIL's Texas meeting, legislators indicated that the issue of a CEO certification could be raised in other NCOIL working committees if needed, and was not necessarily central to the issue of market coduct, according to Mr. Tucker.

The issue of arbitration, which has been used in Florida in the context of rate setting, was something that could be looked at in a broader regulatory context if needed, he added.

A provision that would reference NAIC work products will now include a process by which notice would be given if there is a material change in NAIC standards, and a hearing could be held, he said.

Insurance groups including the American Council of Life Insurers, Washington, and the National Association of Mutual Insurance Companies, Indianapolis, expressed preliminary support for the adopted model.

The model adopted by the state-federal relations committee would bring consistency, efficiency and cost-effectiveness to market conduct oversight, but offers no teeth, according to Lenore Marema, a representative with the Property Casualty Insurers Association of America, Des Plains, Ill.

PCI said it is glad that NCOIL will continue to consider due process but added, if the model is adopted in states as it is currently written, "it will be half a loaf. What happens when an examiner acts outside parameters. There is no remedy."

Kevin Hennosy, a consumer advocate and publisher of SpreatheRisk.org, Kansas City, Mo., also expressed support for the model because it creates a system for market conduct regulation. The model benefits consumers and strengthens state regulation, and should be looked at by Congress when it takes the issue up, he said. It uses a targeted, step-by-step approach, Mr. Hennosy commented.

Mr. Connolly is NU Life-Health edition senior editor