NCSL Voices Its Support for Interstate Compact (7/23/03)

State insurance regulators recognize the financial services industry is changing.

Many products sold by life insurers have evolved to become primarily investment products. Consequently, life insurers increasingly face direct competition from products offered by depository institutions and securities firms. Because these competitors are able to sell one product nationally, often without any prior regulatory review, they are able to bring new products to market more quickly and without the added expense of meeting different requirements in different states.

State insurance regulators have worked diligently over the past two years to identify the issues in this area and come up with possible solutions to reflect the new market realities. Regulators now believe there is a way to develop a more efficient review process for life insurance and annuity products one that will help insurers better compete in the marketplace while maintaining a high level of protection for insurance consumers.

Regulators feel that the best way to accomplish this is through the creation of an interstate compact. In March 2002, the NAIC established the Interstate Compact Working Group to accomplish this goal to create a national, state-based system of insurance regulation that would provide for uniform standards and a single point of filing for several lines of insurance.

The working group drafted a proposed interstate compact will have the flexibility to include life insurance, annuities, disability income and possibly long-term care products.

A broad base of support is critical. State insurance regulators have been working extensively with their legislative counterparts at the National Conference of State Legislators (NCSL) and the National Conference of Insurance Legislators (NCOIL).

This site will help you understand the goals of the NAIC in developing an interstate compact and allow you to submit your comments on the draft. For more information or to submit comments, please contact Andy Beal at ABeal@naic.org.

Interstate Insurance Product Regulation Compact [Word | PDF]

Preamble (12/8/02) [Word | PDF]