Legislators, in discussions held in advance of the Texas session, have said a model could be adopted at the meeting if sufficient compromise is reached on parts of the model now under development. Following adoption, it would be brought to state legislatures.

So far during the Albany, N.Y.-based group's advance discussions, the issue of deference has been one of several key points raised during deliberations over possible changes for the model.

Domestic deference is the concept of other states deferring to a state of domicile.

At this point legislators have said that unless agreement is reached on detailed language, the deference idea is not feasible. Language that had been in an earlier draft reflecting domestic deference was removed.

Legislators during the discussion said a "domestic deference lite" approach for the draft would be more viable.

That approach for the model would make it possible but not mandatory for a commissioner to accept a market conduct report prepared by the insurance commissioner where the insurer is domiciled, Linda Lanam, vice president-annuities with the American Council of Life Insurers, Washington, explained.

Another point that was raised was the issue of references to NAIC models and handbooks in the body of the model.

Inclusion of these references will create uniformity across states, according to Joel Ario, insurance administrator in Oregon and NAIC secretary-treasurer. The concept is similar to the system currently used to regulate financial solvency, he explained.

Uniformity is important to life insurers, according to Ms. Lanam, because it allows companies to build compliance systems that are more cost effective.

But property-casualty insurers are expressing concern over such inclusions, according to Don Cleasby, assistant vice president and general counsel with the Property Casualty Insurers Association of America, Des Plaines, Ill.

Some insurers have expressed concern that referencing the NAIC in the model would give the organization, based in Kansas City, Mo., undue authority.

Birny Birnbaum, an NAIC-funded consumer advocate and executive director of the Center for Economic Justice, Austin, Texas, offered another reason for not referencing the NAIC.

Regulators need to act in a quick and timely manner, and if they have to rely on an NAIC work product that is being developed or needs to be updated, then they might not be able to do this, Mr. Birnbaum said.

The idea that a regulator may be curtailed because the action was not a part of an NAIC tool such as the market analysis handbook is not acceptable, he added.

Mr. Birnbaum also disagreed with any wording that would create a 30-day period before the results of a market conduct report would become public. A report should be made public once it is made final, he said.

He also urged regulators to keep a whistleblower provision for the model. Mr. Birnbaum said current whistleblower laws are not sufficient to protect agents and others who report wrongdoing.

Another provision in the model would require the certification of the company's chief executive officer attesting to the accuracy of statements regarding the insurer's market regulation compliance program. Mr. Cleasby said that the PCI would like to see the provision removed, but Mr. Ario maintained that "it adds a level of assurance that the product is accurate."

Mr. Connolly is NU Life-Health edition senior editor