At the Saturday meeting, the Reinsurance Task Force voted to go on with REO efforts despite the fact that the parent Financial Condition Committee and the Executive Committee have yet to approve the required changes.

“We are in a little bit of an awkward stage right now,” said Andrew Beal, NAIC deputy executive vice president and chief legal counsel.

With every state having a Credit for Reinsurance Act and the great interest in settling the controversy by the senior NAIC leadership, it seems highly likely that the REO would not meet the national criteria, according to regulators.

Reinsurance Task Force members have yet to decide whether or not to scrap the current model and include the REO effort in its restructuring, or merely focus on amending the current model with an eye to modifying the 100 percent collateral requirements for alien reinsurers to operate in this country.

Before any proposal is put before the Executive Committee on a preliminary basis, presumably task force members would have to settle on an amendment or full-scale revision approach.

“This is an interesting question. I have never heard anyone discuss it,” said Neal Alldredge, senior vice president of the National Association of Mutual Insurance Companies.

At the Executive Committee on Saturday, several life sector model laws or amendments were approved along with a property-casualty one related to medical malpractice data.

The Property-Casualty Committee has decided to turn proposed model laws dealing with independent adjuster regulation and prosecution standards for automobile fraud participants into guidelines, not proposals for new state statutes.

This new category of guidelines concerns David Snyder, assistant general counsel of the American Insurance Association, who feels that their uncertain status could be used by regulators or even plaintiff's bar attorneys as almost-law since they were approved by the NAIC body.

“In addition, if these proposed new models get preliminary approval, it will in a sense give them a leg up in the process and give an unfair advantage to its proponents,” he said.

Consumer representative Birny Birnbaum with the Center for Economic Justice in Austin, Texas, said that with the two-thirds approval required of both the Executive and parent committees, a tiny percentage of regulators have veto power over development of such models.

He said he feels that the requirement that all such models in the future have relevance in all 50 states will preclude a lot of needed legislation that may have relevance in significant parts of the nation but not all sections of the country.