Regulators issued a Market Analyst Scorecard. The scorecard indicates that 51 jurisdictions have designated a market analysis coordinator within their insurance departments.

A total of 49 states have completed a core complaint analysis and provided data to the NAIC's market analysis working group on nationally significant companies. Two states, Montana and South Dakota, have not yet completed the core analysis or provided data on nationally significant companies.

During a discussion of the results, Joel Ario, Oregon administrator and NAIC vice president, said that talks with those two states indicate that they intend to complete the analysis and provide the data.

Regulators also reported that 48 states and the District of Columbia completed requirements of the market analysis checklist as adopted in the NAIC Market Analysis Handbook. Checklists on companies resulted in 45 companies being referred to the regulators for further action.

The focus on market analysis has helped reduce the total number of market conduct exams through December 2004 by 16 percent over the same 2003 time period, according to the NAIC.

Other findings in the NAIC ?Market Systems Participation Report' included totals of market conduct exams tracked through its Exam Tracking System. Totals were as follows: 345 in 1999; 458 in 2000; 562 in 2001; 860 in 2002; 1,261 in 2003; 1,019 in 2004; for a 6-year total of 4,505 exams.

The industry survey was conducted by the American Council of Life Insurers, the American Insurance Association, the Blue Cross and Blue Shield Association, the Insurance Marketplace Standard Association, the National Association of Mutual Insurance Companies, and the Property Casualty Insurers Association of America.

It looked at 192 market conduct exams reviewed and conducted in 35 states. Of the exams conducted, 86 were reported as targeted exams and 106 as comprehensive exams. Of the exams reported, 64 involved the use of outside contract examiners. The results pertain to market conduct examinations begun on or after Jan. 1, 2003.

The survey results found that one third of the exams deviated from the NAIC uniformity standards and that while "regulators are striving to adhere to uniformity standards," deviations were still reported.

Among the procedures identified by industry survey respondents were: the use of standardized data calls; processes for conducting exams, particularly pre-examination procedures and the use of the NAIC handbook; as well as time frames set established in uniform procedures.

Other points cited in the industry survey results include the use of an information exchange system for advising companies of deficiencies or problems that include a specific statutory or regulatory basis; and, communication of the basis for penalties and enforcement procedures and policies.

Top areas of departure from the uniform standards include failure to identify items to be billed and billing procedures, and failure to provide time and cost estimates, as well as to provide a draft report within 60 days.

Industry respondents said that failure to follow the NAIC standardized data call and the NAIC Market Conduct Examiners Handbook were among the top 10 concerns they had regarding deviations from uniform standards that the NAIC has developed.

"Our overall sense is that there has been real progress," said Linda Lanam, vice president-annuities, with the American Council of Life Insurers, Washington.

The use of outside contractors to conduct examinations, she said, is sometimes necessary for specific components of an exam. However, Ms. Lanam continued, the industry is hopeful that use can be reduced.

Two-thirds of the exams suggest that examiners are aware of and are using uniform exam procedures, said Lenore Marema, vice president-industry and regulatory affairs with the Property Casualty Insurers Association of America, Des Plaines, Ill. However, she noted that the survey suggests that areas such as standardizing the data call and making notice and timing of examinations more uniform still need improvement.

Ms. Marema also says that PCI disagrees with the collection and use of underwriting guidelines in market analysis. The Market Conduct Examiners Handbook should include tested techniques. It should be a handbook and not a "scrapbook," she said.

Birny Birnbaum, executive director of the Center for Economic Justice, Austin, Texas, told members of the Market Regulation and Consumer Affairs (D) Committee that he was "incredibly disappointed" that regulators were pulling back from adopting underwriting guidelines into the handbook. He asked regulators if they had "the will" to add tools to the handbook to make it effective.

Regulators responded that it was more a matter of clarifying the wording before putting it in the handbook than a decision to leave it out of the handbook.