The Communications, Financial Services and Interstate Commerce Committee voted unanimously to back the draft and prepare a final resolution for approval at the NCSL's April Spring Forum, Committee Chairman and Rhode Island State Rep. Brian Kennedy said. The forum will be held in Washington, D.C., April 7-10.
The National Insurance Supervisory Commission would directly link state regulators and a proposed new federal insurance office. States participating in the new entity, and the NAIC, would identify and develop standards for regulatory uniformity, then enact and enforce those rules. Possible enforcement would include "limited federal pre-emption".
The draft resolution states, in part, "the National Conference of State Legislatures finds the NISC proposal to be a premature and misguided effort that will not appease those who only desire full federal control of the business of insurance, and ... further finds that the NISC proposal is an unwarranted preemption of sovereign rights of states and in particular, the constitutional authority of state legislatures to decide state insurance policy."
Committee members showed "extreme concern" about the NAIC proposal and criticized the NAIC for not being proactive in reaching out to state legislators on the issue, Kennedy said.
"Our hope is that the NAIC will listen to what state legislators have already stated about the plan and will consider letting an independent organization look into drafting a working document that was not wholly created by the NAIC without any outside input or discussion," he said.
NAIC officials have cautioned that the proposal is in its early stages. At a forum at the NAIC's winter meeting this month, insurers and legislators heavily criticized the proposal as ill-advised and premature.
Ohio Insurance Director Mary Jo Hudson addressed the NCSL committee members on the issue, Kennedy said. Hudson could not immediately be reached for comment.
The Obama administration's regulatory reform modernization proposal, released in June, called for insurance proposals to reflect "increased national uniformity through either a federal charter or effective action by the states" (BestWire, June 17, 2009).