Insurers argue that the costs outweigh the benefits of these changes. At press time, the National Association of Mutual Insurance Companies, Indianapolis, is finalizing a study that it says will quantify these costs. Results of that study could be released next week.

During a discussion of corporate governance or Title III issues, it was reaffirmed that when a state's statutes differed from the draft's requirements, the draft language deferred to state law.

The requirement that a financial expert be appointed by a company to an audit committee was removed because regulators maintained that states could not provide the same assurances of safe harbor protection from liability that federal law affords.

Ed Stephenson, representing the National Alliance of Life Companies, Rosemont, Ill., raised a concern that the model's requirements regarding the appointment of an independent board of directors goes beyond the regulatory authority of a significant number of insurance commissioners and impinges on states' statutes establishing corporate frameworks.

And, Bill Boyd, NAMIC's financial regulation manager, says that although NAMIC still has major concerns regarding the Model, some of the changes on Title III were positive steps. Requirements in Title IV changes in Section 404 of the model is still a big issue for NAMIC, Boyd says.

Changes to MAR will also receive discussion during the summer meeting of the National Conference of Insurance Legislators, Troy, N.Y., during its summer meeting in Newport, Rhode Island on July 7-10.