Regulators Proceed with Market Analysis Proposal

State insurance regulators have adopted a proposal which further supports their efforts to develop a uniform system for collecting insurance companies’ market-related information.

Regulators moved forward with their latest efforts on this key initiative — referred to as the Market Conduct Annual Statement (MCAS) — during the National Association of Insurance Commissioners (NAIC) Fall National Meeting in National Harbor, Md.

“The MCAS database centralizes storage of the states’ market conduct data, which, in turn, provides regulators with better aggregation and analysis of the results,” said NAIC President and Kansas Commissioner Sandy Praeger. “This is similar to the approach we’ve taken with other reporting initiatives that have worked well in the past.”

In addition to insurance companies’ financial data, the states have previously collected information on post-catastrophe and long-term care insurance claims using the NAIC as a centralized point for aggregation of the data. This procedure is based on existing state authority to share information with the NAIC and other states.

Calendar year 2009 will be a transition period, as regulators work to find the best possible way to collect the data — according to a two-part plan for moving the project forward:

• Short-Term: The first part of the plan provides for the transfer of MCAS data collected in 2009 by the 29 participating states to the NAIC for storage, aggregation and analysis in the existing Access Database format. The proposal also provides direction for NAIC staff to analyze the aggregated data and identify strengths and weaknesses in the data currently being collected.
• Long-Term: The second part of the plan focuses on the long-term commitment of the NAIC to centralize collection of market conduct data. Although centralized data collection has been contemplated by the NAIC Market Regulation and Consumer Affairs (D) Committee since at least December 2007, the key difference from prior proposals is that the NAIC did not move forward with the Committee’s recommendation to collect 2010 market data via the NAIC Annual Statement.

“The NAIC membership has reached a compromise position by adopting an approach that provides for a short-term transition period in 2009 and commits to moving forward in the long-term, with all jurisdictions collecting MCAS data in 2010 and aggregating this data at the NAIC,” said Montana State Auditor John Morrison, who chairs the Committee. “With regard to the long-term effort, the key issues of whether the collected information should be treated as confidential, as well as the method to be used to collect the information, will be resolved at a later date. The process will naturally include input from all interested parties.”

The NAIC will consider the project’s Business and Fiscal Impact Statement, which formally provides for the allocation of resources to implement the short-term transition proposal in 2009, as part of the formal 2009 budget package to be voted on in December.

For more information, visit the MCAS page on the NAIC Web site at www.naic.org/committees_d_mcas.htm.