The National Conference of Insurance Legislators said it will conduct an in-depth study of state regulation of insurance in an effort to determine where it works well and where it could be improved.
According to officials, among items for study would be a possible state framework to handle federally chartered insurers if Congress were to approve an optional federal charter system.
NCOIL president, Michigan State Sen. Alan Sanborn, R-Richmond, said the Insurance Legislators Foundation study is the first of its kind and will aim to create a more effective and efficient structure to better serve both the industry and consumers.
The Atlanta-based law firm Lord, Bissell & Brook will conduct the study with Navigant Consulting and Joseph Zimmerman, a professor at the State University of New York at Albany.
James Schacht, a former Illinois regulator and Navigant executive, will lead the study.
Mr. Sanborn said NCOIL recognizes the increased blurring of lines of responsibility with regard to state insurance regulation and feels the time is ripe to examine the role of regulators, lawmakers, state attorneys general, the courts and the National Association of Insurance Commissioners, as well as additional governmental and other entities.
The study comes as federal lawmakers consider the creation of an optional federal charter, which has been backed by the American Council of Life Insurers and the American Insurance Association and is opposed by both NCOIL and the NAIC.
“If the policy ambition of some to create an optional federal charter becomes a reality, the states must be in a position to have a real and legitimate state option for insurers that may contemplate securing a federal license,” Mr. Sanborn said. “This study will assist in that effort.”
The study also comes amid complaints by some brokerage groups that state attorneys general have been putting rules in place for the industry and infringing on the territory of lawmakers.
NCOIL will hold a special session at its summer meeting in July to discuss the preliminary results of Phase I.
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