The National Conference of Insurance Legislators (NCOIL) should be getting the fees now paid by states to the National Association of Insurance Commissioners (NAIC), according to a new study by the NAIC’s research arm. The issue of who gets state fees is one of several raised in a new report from the NCOIL’s Insurance Legislators Foundation (ILF). State assessments accounted for $2 million of NAIC’s $64.2 million budget in 2006, according to NAIC figures.

Susan Nolan, NCOIL’s executive director, said “There needs to be more legislative involvement and oversight of the NAIC. We have to develop the best system that we can have. But we need more funding in order to do so.”

In addition to the funding issue, the report’s recommendations call for elevating or maintaining state insurance commissioners as full department heads; increased legislative oversight of insurance regulation; more open NAIC meetings; strengthened state insurance regulation through expansion of the Interstate Compact; and support of an independent commission of stakeholders to consider more steps to strengthen state insurance regulation.

The recommendations represent Phase II of the ILF report, “A Study on State Authority: Making a Case for Proper Insurance Oversight.” The PIA Insurance Foundation contributed $50,000 to help fund the NCOIL Foundation study.

The ILF will consider whether to recommend the plan to the full NCOIL Executive Committee in a hearing at the NCOIL Annual Meeting in Las Vegas. If approved by ILF, the full NCOIL Executive Committee will decide on the recommendations before the meeting closes on November 18, said Nolan. The NAIC has declined to respond to the NCOIL recommendations.

November 14, 2007