|
Ohio Insurance
Commissioner Outlines
Progress of NAIC Modernization
Initiatives
Says Gramm-Leach-Bliley Reforms are
On-Track
WASHINGTON, D.C. - Testifying before a
leading Congressional panel on the status of nationwide insurance
regulatory reforms and the impact in Ohio, Lee Covington, Ohio’s
Director of Insurance, today outlined the progress the NAIC and
state insurance regulators are making to meet and surpass the
requirements of the Gramm-Leach-Bliley Act (GLBA). Today’s hearing
was the second such hearing called by Rep. Michael Oxley, Chair of
the U.S. House of Representatives Commerce Subcommittee on Finance
and Hazardous Materials Committee.
Responding to questions about state regulatory
reform efforts, Covington told members of Congress, "I am excited to
report that state insurance regulators remain strongly committed to
our modernization initiatives with unprecedented consensus."
Covington went on to assure the committee of the NAIC’s commitment
to meaningful and timely reforms, "After a series of meetings
leading to our most recent national meeting, we have accomplished
just what you had hoped to see — specific proposals with specific
timeframes."
Testifying on behalf of the State of Ohio,
Covington used today’s hearing to update members of Congress on
progress NAIC members have made to meet the requirements of the
Gramm-Leach-Bliley Act and improve the current system of state
insurance regulation since NAIC President and Kentucky Insurance
Commissioner George Nichols III testified on July 20:
- Commenting on the status of its regulator-to-regulator
dialogue, Covington said, "we are actively coordinating and
cooperating with federal functional regulators through cooperation
agreements, personal contacts, and information exchanges among
state and federal supervision staff." Twenty-three states have
signed information-sharing agreements with the Office of Thrift
Supervision (OTS), and 28 states have signed a consumer-complaint
sharing agreement with the Office of the Comptroller of the
Currency (OCC).
- With respect to privacy issues, Covington briefed the
committee on the final work product of the NAIC’s Privacy Issues
Working Group, which is expected to be adopted by the NAIC
membership by the end of the month. "We have developed model
privacy rules similar to the federal privacy regulations that can
be quickly adopted by the states to assure compliance with GLBA,"
he said.
- In the area of Producer Licensing, Covington discussed the
ongoing efforts to secure a national licensing system. "We are
establishing a national licensing system for insurance agents and
brokers that will fully satisfy the NARAB provisions in GLBA by
achieving reciprocity among states while we develop a uniform
50-state system," Covington continued. Responding to questions
regarding the timeframe for improvements, he also briefed the
panel on the newest developments with the National Insurance
Producer Registry (NIPR), "Earlier this month, NIPR began a pilot
project with four states participating, including Ohio, and we
expect to have all states operational by 2001."
Covington also provided testimony on two of the
most important NAIC modernization initiatives — national treatment
of insurers and speeding insurance products to market — where state
regulators are moving beyond the requirements of GLBA to modernize
the state regulatory system.
A National Treatment of Companies Working Group has
been established to identify regulatory procedures that will treat
eligible insurance companies the same across the nation. The NAIC
plans to develop a streamlined operating structure that would give
certain companies "national treatment" for regulatory procedures
related to solvency monitoring, holding company supervision,
approval of mergers and acquisitions, market conduct reviews, and
corporate re-organizations.
The Speed to Market Working Group is responsible
for identifying one-stop filing procedures and a more efficient
process for state regulatory approval of insurance products marketed
to consumers. Two new subgroups will focus efforts on developing
details for single-point product filing system through the
Coordinated, Advertising, Rate, Form and Review Authority
(CARFRA).
"We are committed to achieving the specific
objectives of regulatory modernization on a set schedule while
continuing to preserve consumer protection through state regulation.
We look forward to continuing our work with Congress, our Governors
and legislatures, and other interested parties as we develop and
implement our modernized programs," Covington stated.
"Ohio is leading the way in modernizing state
insurance regulation by being the first state to adopt reciprocity
for agent licensing, implementing a state-of-the-art internet
licensing system, piloting the National Insurance Producer Registry
allowing one-stop licensing for non-resident agents, and adopting
regulations to speed the time for insurance product approvals,"
Covington noted. "We are also leading the way in facilitating the
use of e-commerce."
State insurance commissioners are the public
officials responsible for regulating the business of insurance and
protecting the interests of consumers. In 1998, states nationwide
employed 12,500 regulatory personnel and spent $853 million on
regulatory and consumer protection activities. State insurance
departments presently handle approximately 4 million consumer
complaints and inquiries each year.
The NAIC is located on the World Wide Web at
www.naic.org. It is the nation's oldest association of state
government officials, consisting of insurance regulators from the 50
states, the District of Columbia and four U.S. territories.
- 30 -
|
