NCOIL’s continues its opposition to provisions which preempt state authority in H.R. 10, the Financial Modernization Act.

As the Congressional session wanes and a Senate floor vote appears imminent, NCOIL continues its efforts to remove other provisions of H.R. 10 which preempt state authority.

In a letter to Senate Majority Leader Trent Lott, Sen. Gary Richardson, NCOIL President stated, “NCOIL strongly supports modernizing Federal financial services laws provided they preserve the states rights to regulate insurance. With several amendments, we believe H.R. 10 can reaffirm state primacy in the regulation of insurance and, at the same time, allow financial services modernization to proceed productively for the benefit of American consumers, business, and the growing international market. The amendments are needed because H.R. 10, unfortunately, represents a potentially devastating reversal of avowed Congressional intent to allow more decision making to remain and/or revert back to the states.”

The amendments pertain to the primacy of states to regulate insurance, bank affiliation provisions, and the licensing of agents and brokers.

Since the publication of the last NCOILetter, the U.S. Senate Banking Committee struck from H.R. 10 the controversial provision which would have allowed mutual insurers to redomesticate in another state if their state of domicile did not enact a mutual insurance holding company law. NCOIL, along with the NCSL and NAIC have fought against the proposal for more than a year.

SUBCOMMITTEE TO HOLD HEARING ON UNIFORM RECEIVERSHIP LAW

NCOIL’s Insurance Receivership Compact Subcommittee will hold a public hearing on the Uniform Receivership Law (URL), promulgated by the Interstate Insurance Receivership Commission, on Thursday, November 19 in conjunction with NCOIL’s 1998 Annual Meeting and Seminar.

The Interstate Insurance Receivership Commission was established pursuant to the Interstate Insurance Receivership Compact. The Compact was created to improve the existing system of handling insurance company insolvencies by making the laws and operating procedures governing receiverships more uniform and by establishing reasonable, objective standards for their operation and performance. The Receivership Commission formed by the Compact can also act as a clearinghouse for receivership information, provide a mechanism for dispute resolution, monitor, oversee and correct the operation of receiverships when necessary, and train receivership staff. The current compacting states are Illinois, Michigan, and Nebraska.

The Subcommittee seeks testimony on the URL from state legislators and regulators, insurance industry representatives and other interested parties regarding how will improve the receivership process in compacting states, how it could benefit non-compacting states, and if it will encourage additional states to join the Compact.

Under the terms of the Compact, the URL will become law in each of the compacting states (unless specifically rejected by a state) if adopted by a majority of them The URL was developed to make the process of insurance receiverships more efficient by, among other things, clarifying the types of entities that may be placed in receivership, the receiver’s authority, and civil procedures of receiverships, as well as improving communication and access regarding receiverships, promoting a receivership plan, and interfacing with guaranty associations. Individuals registered for the meeting may testify at the hearing.

ANNUAL MEETING SET FOR NOVEMBER 19-21 IN SAN DIEGO, CALIFORNIA

Leading state legislators, regulators, and industry representatives are set for what is shaping up to be an outstanding NCOIL Annual Meeting.

The meeting is scheduled for November 19 through 22, 1998 at the San Diego Hilton Resort.

The Annual Meeting program calls for hearings on the Uniform Receivership Law (see article on page 4) and the NAIC Codification Project. Individuals registered for the meeting may testify at the hearings.

A registration form is enclosed in this edition of the NCOILetter. Those requiring hotel accommodations must register by October 30.