NCOIL 2009 Summer Meeting Preview

Jun 22, 2009

The National Conference of Insurance Legislators (“NCOIL”) will hold its Summer Meeting from July 9-12, 2009 in Philadelphia.  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 each Committee’s mission, click on the hyperlinks below):


Executive Committee

  • Discussion of NAIC implementation of the Reinsurance Regulatory Framework
    • The Framework would create two new classes of U.S. reinsurers in the United States:  U.S.-domiciled national reinsurers and non-U.S.-based port of entry reinsurers.  It also would introduce modified collateral requirements for eligible reinsurance companies.

Property-Casualty Insurance Committee

  • Consideration of the Model Act Regarding Auto Airbag Fraud
    • This Model Act would establish criminal penalties for fraudulent installation or reinstallation of an airbag, with more severe penalties for fraud resulting in serious injury or death.  It also would require that auto repair facilities maintain detailed records of airbags they purchase, sell, or install, and mandate that a repair facility submit an affidavit to a vehicle owner stating that an airbag was installed and calibrated properly.  The proposed legislation would establish that police accident reports must note whether an airbag deployed and also would provide that a person trading or selling a motor vehicle must disclose whether an airbag is inoperable.  To view the Model Act, click here.
  • Consideration of the Model Act Regarding Motor Vehicle Crash Parts and Repair
    • The Model Act would apply to personal lines motor vehicle insurance policies and require disclosure and consent prior to crash part repair or replacement.  It also would establish conditions whereby insurers could require the use of aftermarket crash parts, including provisions regarding new vehicles and those under original car-company warranty.  Permanent, transparent identification of crash parts would be mandated, as well as consumer choice in selecting an auto repair facility.  To view the Model Act, click here.
  • Natural Disaster Insurance Subcommittee report
  • Consideration of uniform crop adjuster licensing proposal/federal preemption
    • Drafting of a letter to insurance legislative committee chairs in states whose crop adjuster licensing laws may be preempted by the federal Risk Management Agency (“RMA”) will be considered.  The letter would encourage the 14 affected states to forestall federal preemption by amending their laws to require crop adjuster testing that is specific to the crop insurance program.  It also would note that states now require passage of only a general property-casualty test.  Legislators would be encouraged to work with their respective states’ insurance departments to enact reform.  To view the draft letter, click here.
  • Amending the 2002 NCOIL Model Act Regarding Use of Credit Information in Personal Lines Insurance
    • The proposed Amendment would add an extraordinary life circumstances (“ELC”) drafting note into the body of the Model Act and mandate that insurers give rating/underwriting relief to consumers whose credit has suffered from an ELC.  Under the Amendment, ELCs would include federal or state-declared catastrophes; serious illness or injury to a consumer or his/her immediate family; death of a spouse, child, or parent; divorce or involuntary interruption of legally-owed alimony or support payments; identity theft; temporary and involuntary loss of employment for three months or more; and military deployment overseas, among other items.  To view the Amendment, click here.

    Subcommittee on Natural Disaster Insurance Legislation

    • Update on the National Association of Insurance Commissioners (“NAIC”) Catastrophe Rating Model and Mega-Catastrophe White Paper
    • Examination of triggers and funding for proposed catastrophe fund mechanism
      • The proposal would build on longstanding NCOIL efforts to enact comprehensive catastrophe reform by establishing a long-term financing strategy framework for states to utilize in the development of an optional state catastrophe pool. The proposal also outlines adherence to NCOIL-endorsed statewide building codes and land-use strategies, as well as discusses insurance premium tax credits tied to market share that would be designed to encourage pool participation. To view the proposal, click here.

    State-Federal Relations Committee

    • Report on federal proposals, including:  Office of Insurance Information, National Association of Registered Agents and Brokers II and surplus lines/reinsurance reform
    • Discussion of state modernization efforts, including:  producer licensing, market analysis and interstate compacts
    • Discussion of producer fingerprinting/background check standards
    • Consideration of the Market Conduct Annual Statement Confidentiality Model Act
      • This Model Act would require that market conduct annual statement (“MCAS”) data and analysis be kept confidential and privileged and establish a state insurance information sharing system.  To view the Model Act, click here.
    • Consideration of the Resolution Favoring Continued State-Based Insurance Consumer Protection
      • The Resolution would affirm state regulation over insurance as established under the McCarran-Ferguson Act and provides that insurance consumer protection should remain with the states.  The Resolution also declares that the creation of a new Financial Product Safety Commission would be established by companion bills S. 566 and H.R. 1705, the Financial Product Safety Commission Act of 2009, should not have any jurisdiction over insurance-related products. To view the Resolution, click here.

      Financial Services and Investment Products Committee

      • Overview of federal systemic risk proposals
      • Consideration of credit default insurance model legislation
        • Based on the State of New York’s financial guaranty insurance law, the proposed bill would include a new definition of credit default insurance (“CDI”) and would establish a state regulatory regime to oversee the CDI market.  The bill would provide for requirements regarding company licensing; contingency, loss, and unearned premium reserves; policy forms and rates; and reinsurance.  To view the Model Bill, click here.  To view comments submitted on the Model Bill, click here.
      • Review and discussion of proposals relating to municipal bond insurance

      Workers’ Compensation Insurance Committee

      • Report on state professional employer organization activity/NCOIL model
      • Consideration of the Resolution Opposing the Creation of a Federal Commission to Examine State Workers’ Compensation Laws
        • The Resolution would reiterate NCOIL support for state workers’ compensation systems, affirm that state benefit delivery programs respond to each jurisdiction’s individual needs and stress recent state cost-containment reforms.  It also states opposition to any legislation creating a broader federal role in workers’ compensation and specifically opposes federal H.R. 635, The National Commission on State Workers’ Compensation Laws Act of 2009.  To view the Resolution, click here.
      • Consideration of the Employee Misclassification Workers’ Compensation Coverage Model Act
        • Designed to regulate independent contractors, the Model Act would set a nine-point test to define an independent contractor; mandate workers’ compensation coverage in the construction industry with certain exemptions; and establish clear insurer application, disclosure and auditing procedures.  The proposed legislation also would provide civil and criminal penalties for employee misclassification and insurance fraud, as well as establish strict regulator enforcement authority, such as authorizing temporary job sites closures for non-compliance.  To view the Model Act, click here.

      Life Insurance and Financial Planning Committee

      • Report on state/federal life settlements activity
      • Report on U.S. Securities and Exchange Commission indexed annuity activity
      • Report on NAIC annuity suitability developments
      • Report on principles-based reserving efforts
      • Discussion of life insurer capital and surplus relief efforts
      • Consideration of a Life Insurance Awareness Month Resolution

      Health, Long-Term Care and Health Retirement Issues Committee

      • Discussion of balance billing meeting/next steps
      • Update on state Long-Term Care Partnership Program activity
      • Update on Medicare Advantage plans
      • Discussion of proposed comprehensive federal reforms
      • Discussion of health insurance rescission/third-party review models

      International Insurance Issues Committee

      • Discussion on the evolving global impacts of the financial crisis
      • Report on International Accounting Standards Board/Financial Accounting Standards Board decisions on insurance contracts
      • Discussion of federal efforts to eliminate favorable overseas tax treatment
      • Discussion of Solvency II Group support concerns
      • Report on capital adequacy and the reinsurance industry


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