NCOIL 2009 Annual Meeting Preview

The National Conference of Insurance Legislators (“NCOIL”) will hold its Annual Meeting from November 18-22, 2009 in New Orleans.  To view the tentative meeting agenda, click here.  To view the meeting materials packet, click here.

NCOIL Committees scheduled to meet are listed below, along with respective anticipated discussion topics.  To view the referenced documents, click on the hyperlinks below.

 

Should you have any questions or comments, please contact Colodny Fass.

 

Executive Committee

• Insurance Fraud
  • On November 22, the Committee will review-as per NCOIL bylaws-an NCOIL Insurance Fraud Model Act, originally adopted by the Committee in July 1995.  The model law would facilitate the detection and would reduce the occurrence of fraud through stricter enforcement and deterrence, restitution, and increased partnership among consumers, the insurance industry, and the states.  The model law was amended in 1998 and readopted in 2001 and 2004.  
• Reinsurance Collateral
  • On November 22, the Committee will discuss NAIC implementation of its Reinsurance Regulatory Modernization Framework, including the status of National Association of Insurance Commissioners (“NAIC”) federal enabling legislation known as the Reinsurance Regulatory Modernization Act of 2009. 
  • The Modernization Framework would create two new classes of reinsurers in the United States:  U.S.-domiciled national reinsurers and non-U.S.-based port of entry (“POE”) reinsurers.  Among other things, the Framework would introduce modified collateral requirements for eligible reinsurance companies.
  • In a December 2008 letter to the NAIC, NCOIL urged for transparent, publicly accountable governance of the Framework’s Reinsurance Supervision Review Department (“RSRD”), said that the RSRD should be independent and should fairly represent all jurisdictions, and expressed concern over proposed federal enabling legislation.
  • A 2005 NCOIL resolution requested that NAIC report to NCOIL on its reinsurance collateral activity and recognized the importance of domestic and non-U.S. reinsurers, among other things.

 

Financial Services and Investment Products Committee

• Credit Default Insurance Legislation
  • On November 19, the Committee will consider proposed Credit Default Insurance Model Legislation, sponsored by Committee Chair Assemblyman Joseph Morelle (NY).  The model bill-based on New York State financial guaranty insurance law-would include a first-of-its-kind definition of credit default insurance (“CDI”) and would establish a state regulatory regime to oversee the CDI market.  The model would contain requirements regarding company licensing; contingency, loss, and unearned premium reserves; policy forms and rates; and reinsurance, among other things.  It would define authorized CDI and prohibit and penalize parties that engage in unauthorized CDI.  In doing so, the model would ban so-called “naked” CDS.    
  • NCOIL has hosted a full-day hearing on CDS regulation, discussed CDS regulation at its Spring and Summer Meetings, and convened eight conference calls to develop the proposal.  Most recently, on October 20, the Committee approved friendly amendments to the transition section of the proposed model in order to grandfather certain outstanding financial guaranty insurance policies.

 

Health, Long-Term Care and Health Retirement Issues Committee

• Fees for Uncovered Dental Services
  • On November 20, the Committee will consider a Model Act Banning Fee Schedules for Uncovered Dental Services, sponsored by Representative Brian Kennedy (RI).  The model bill, which is based on a 2009 Rhode Island law, would prohibit an insurance plan from requiring a dentist to accept a fee for uncovered services set by a plan, unless the plan compensates the dentist.  The model would also prohibit insurers from leasing their dental network providers to third-party administrators or other plans that set similar fee schedules.

 

Property-Casualty Insurance Committee

• Aftermarket Crash Parts/Auto Body Steering
  • On November 21, the Committee will consider during a special meeting a Model Act Regarding Motor Vehicle Crash Parts and Repair, sponsored for discussion by Committee Chair Representative Charles Curtiss (TN).  The model law would require disclosure and consent prior to crash part repair/replacement; establish conditions whereby insurers could require use of aftermarket crash parts; mandate permanent, transparent identification of crash parts; and promote accountability.
  • The model also would place restrictions on insurers in order to promote consumer choice in selection of an auto repair facility.  During recent conference calls to develop the model, legislators reserved their discussion of the issue until the Annual Meeting, at which time they will consider separating the provisions into a separate model law and will review related state approaches.
  • Legislators at the Annual Meeting also will examine interested-party amendments to certain definitions in the draft model, among other things.
• Airbag Fraud
  • On November 19, the Committee will consider during a special meeting a Model Act Regarding Auto Airbag Fraud, sponsored by Representative Brian Kennedy (RI).  The model act would establish criminal penalties for fraudulent installation or reinstallation of an airbag, with more severe penalties for persons whose airbag fraud results in serious injury or death; require that auto repair facilities maintain detailed records of airbags they purchase, sell, or install; mandate that a repair facility submit an affidavit to a vehicle owner saying that an airbag was installed properly; establish that police accident reports must note whether an airbag deployed; and provide that a person trading or selling a motor vehicle must disclose whether an airbag is inoperable, among other things.
  • At the meeting, legislators will determine whether or not to include salvaged airbags in the model, as well as will discuss disclosure and other concerns regarding fleet vehicles that are purchased without airbags.  The Committee developed the draft model during conference calls following the Summer Meeting.

 

State-Federal Relations Committee

• Federal Insurance Office Legislation
  • On November 20, the Committee will consider a Resolution Opposed to H.R. 2609, the Federal Insurance Office Act of 2009, sponsored by Committee Chair Representative Greg Wren (AL).  The resolution notes that pending Federal Insurance Office (“FIO”) legislation extends well beyond a 2008 proposal to create an Office of Insurance Information (“OII”) and ultimately opposes the creation of an FIO, OII, and/or Office of National Insurance (“ONI”).  The resolution asserts that several of the goals behind creating an FIO could be realized through intergovernmental information sharing and by including state officials on any council or board that Congress may create to monitor financial markets.  In addition, the resolution asserts that, like a related 2008 OII bill draft, an OII is the first step toward an optional federal charter (“OFC”) and that an unaccountable OII would unnecessarily preempt state insurance regulation.  
• Market Conduct Annual Statement
  • On November 20, the Committee will consider a Market Conduct Annual Statement Model Act, sponsored by Senator James Seward (NY).  The model would require that market conduct annual statement (“MCAS”) data and analysis be kept confidential and privileged and would establish a system in which state insurance commissioners could confidentially collect, analyze, and share MCAS data with other entities, including the NAIC.  Friendly amendments to the model bill would clarify provisions related to a Commissioner’s designee and to confidentiality protections afforded under state law.
  • The proposed model responds to concerns expressed in a 2008 NCOIL resolution regarding NAIC authority to collect market conduct data through the annual statement, costs versus benefits, confidentiality, and legislators’ ability to offer input.

 

Subcommittee on Natural Disaster Insurance

• Public-Private Catastrophe Financing
  • On November 19, the Subcommittee will consider a proposal regarding public-private catastrophe financing, sponsored by Representative George Keiser (ND).  The proposal-which would build on long-standing NCOIL efforts to enact comprehensive catastrophe reform-attempts to establish a framework in which a state develops a long-term financing strategy based on an optional state catastrophe pool and on adherence to NCOIL-endorsed statewide building codes and land-use strategies.  The proposed system, among other things, would offer insurer premium tax credits to encourage participation in the pool and would tie participation to an insurer’s market share. 

 

Workers’ Compensation Insurance Committee

• Independent Contractor Misclassification
  • On November 19, the Committee will consider a Construction Industry Workers’ Compensation Coverage Model Act, co-sponsored for discussion by Representative Charles Curtiss (TN) and Senator Ralph Hudgens (GA).  The model would target employee misclassification in the construction industry through transparency, disclosure, and accountability.  It would require that all construction employers and employees have coverage, except sole proprietors on residential projects and homeowners; would hold primary contractors liable for the uninsured employees of any subcontractor hired; and would establish auditing procedures.  The model also would provide penalties for insurance fraud and would enhance enforcement authority.
  • A subcommittee held seven conference calls following the 2009 Summer Meeting to consider interested-party amendments to an originally proposed Employee Misclassification Workers’ Compensation Coverage Model Act, which took a broader approach to the issue.  On the conference calls, legislators opted to narrow the model’s scope to address only the construction industry, due to concerns that a wide-ranging bill might conflict with established definitions in state workers’ compensation, disability, and employment laws.

 

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