Market Regulation and Consumer Affairs (D) Committee
December 4, 2007

The Market Regulation and Consumer Affairs (D) Committee met in Houston, TX on Dec. 4, 2007.
 
During this meeting, the Market Regulation and Consumer Affairs (D) Committee:

  1. Discussed and considered options for NAIC staff to take over support for the Market Conduct Annual Statement from Ohio. The D Committee adopted a motion to support the NAIC to take over this support through the creation of a new market data collection system with centralized data collection and storage of this data at the NAIC. This system could accommodate all new additions and any changes as the need arises now and at any time in the future. This option would also provide for the following: (1) data collection, validation, aggregation, analysis, storage and access to other states’ MCAS data.
  1. Received the report of the Antifraud (D) Task Force. The Producer, Company, Unauthorized Entities and Unlawful Activity Working Group distributed the draft of the Unauthorized Entities Manual. The draft is currently posted on the NAIC website and comments will be accepted until December 31, 2007. The Federal and International Enforcement Coordination Working Group received an update concerning activities of the Insurance Association of Insurance Fraud Agencies and the efforts at the International Association of Insurance Supervisors Conference. The Antifraud Liaison Working Group received a report regarding the Bank Secrecy Act Advisory Group and upcoming conference calls, received a report from the National Insurance Crime Bureau regarding changes within the organization and future plans and received a report from the Coalition Against Insurance Fraud (CAIF) regarding legislative updates in NY, NJ, CT, FL, CA, UT, OK and MI. The Antifraud Training and Seminar Working Group discussed topics for the NAIC Fraud Investigation Seminar to be held April 1-2 in Orlando and discussed topics for the new 2008 Basic Training for Insurance Fraud Investigators. The Information Sharing and Technology Working Group discussed the status of the Online Fraud Reporting System enhancement that will allow industry to report by group code.  The NAIC/NASAA Enforcement Coordination Working Group discussed plans for the NAIC/NASAA Joint Training Seminar to be held before the NAIC Summer National Meeting in San Francisco.
  1. Adopted the report of the Producer Licensing Working Group, which discussed Producer Licensing Coalition initiatives and progress of state assessments, advising fifteen state assessments have been completed as of the Winter National Meeting. The working group adopted a motion to support the building of a regulator warehouse to coordinate the transmission of attachments associated with the licensing application. The working group also received an update on the status of the State Producer Licensing Reengineering Project and received an update from NIPR regarding verification of State Business Rules, implementation of states to existing products, and the future activity of Focus Groups in January. The working group received an update on the state issuance of the Model Flood Bulletin, discussed plans for an interim meeting scheduled to take place at the end of April 2007 following the E-Regulation Conference in Kansas City and discussed Crop Insurance Adjuster Licensing issues with the Crop Insurance Working Group.
  1. Adopted the report of the Market Regulation Handbook Working Group, which reported its adoption of new core competency standards for contract examiners and the continuum of regulatory responses. The working group also reported it discussed proposed draft standards regarding affiliated business arrangements and illegal kickbacks. The proposed draft standards, which were presented for review to the Working Group, interested regulators and interested parties on November 15, are to be placed in Chapter 18—Conducting the Title Insurance Company and Title Insurance Agent Examination of the Market Regulation Handbook.
  1. Adopted the report of the Market Analysis Priorities Working Group. The working group adopted a report highlighting how market analysis has been used to identify companies for further scrutiny as well as how it has eliminated the need for other further scrutiny. The Working Group also adopted a report outlining how the working group members successfully used outreach through quarterly calls to educate states and encourage participation in market analysis efforts. The working group reviewed the progress of the 2007 Subgroups.  The Market Analysis Research & Development Subgroup reported that during the year it had reviewed, analyzed, and made recommendations to the following six market tools: Market Analysis Prioritization Tool (MAPT); Market Analysis Review System (MARS) Level 1 and 2 Analysis; Market Initiative Tracking System (MITS); Market Analysis Profile Report; Market Analysis Market Share Report; and the Market Analysis Profile (MAP) Demographics. The Market Conduct Annual Statement (MCAS) discussed proposed clarifications of the Property & Casualty Data Calls and discussed the Life and Annuity Data Calls. Clarifications and enhancements from these discussions will be posted on the NAIC’s website in early Dec. for comments from both regulators and interested parties. Finally, the working reported that it adopted a motion to have the Chair request the Blanks Committee begin collecting a Market Analysis contact. The Working group also passed the recommended placement of the “proper analysis” definition in the Market Regulation Handbook and to forward the recommendation to the Market Regulation Handbook (D) Working Group.

  1. Received a report of the Market Analysis Working Group that they had discussed specific companies and entities with current or potential market regulatory issues impacting multiple jurisdictions. This discussion occurred in regulator-to-regulator session in accordance with the NAIC Policy Statement on Open Meetings (discussions involving specific companies, entities or individuals).

  2. Received a brief update on the status of state reporting to the NAIC’s Market Information Systems.

 

Action Items:

    1. Adopted a motion to support the NAIC assuming support for the Market Conduct Annual Statement from Ohio through the creation of a new market data collection system with centralized data collection and storage of this data at the NAIC.

    1. Adopted the report of the Producer Licensing Working Group, which includes support for the building of a regulator warehouse to coordinate the transmission of attachments associated with the licensing application.

    2. Adopted the report of the Market Regulation Handbook Working Group, which included the adoption of new core competency standards for contract examiners and the continuum of regulatory responses.

    3. Adopted the report of the Market Analysis Priorities Working Group, which included the adoption of the following: (1) a report highlighting how market analysis has been used to identify companies for further scrutiny as well as how it has eliminated the need for other further scrutiny and (2) a report outlining how the working group members successfully used outreach through quarterly calls to educate states and encourage participation in market analysis efforts; and (3) a motion to request the Blanks Committee begin collecting a Market Analysis contact.