The working group considered amending other existing model laws or requirements such as the Risk-Based Capital for Insurers Model Act, Own Risk and Solvency Assessment (ORSA) Model Act and the annual statement filing, but couldn't find a framework that could be extended to allow for the collection and protection of confidential information.

In its questionnaire for evaluating the development of a model law, the working group said that the development of this model law would serve to bring about increased consistency and compliance with international standards, which is best achieved through a national standard.

However, the NAIC working group checked the box “No” for whether the proposed model law was a response to or impacted by federal laws or regulations.

One of the standards of the internationally-established Insurance Core Principles (ICPs) — to which the U.S. insurance system generally adheres — requires adequate top-level controls, checks, structures and communication in an extensive fashion and detail.

The likelihood that state legislature will adopt the model law in a uniform manner within three years of adoption by the NAIC is moderately high, according to its checklist.