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ATLANTA-State insurance regulators continue to question the nation's largest workers compensation data-gathering organization on its proposed conversion to a for-profit entity.
Darla L. Lyon of South Dakota, chairwoman of the National Assn. of Insurance Commissioners' Workers Compensation Task Force, said last month at the NAIC's winter meeting that her committee is hoping to get an early look at the final version of the National Council on Compensation Insurance's plan for conversion. The NCCI may issue its proposal as early as the end of this month.
At that NAIC meeting, held last month in Atlanta, Alfonso Mastrostefano, insurance superintendent of Rhode Island, suggested that the NCCI provide state insurance regulators with its detailed conversion plan immediately after the NCCI's board votes on it but before it is mailed to NCCI members for a vote.
NCCI bylaws give the organization 15 days after board approval to alert members to the proposed conversion, though the NCCI would probably give them 30 to 60 days-from the time the proxy
is mailed until the deadline for returning it-because of the importance and complexity of the issue, said Sally B. Nary, senior vp and general counsel of the Boca Raton, Fla.-based NCCI.
"We agreed we will sit down with interested regulators to talk about the specifics of the board proposal," she said in an interview after the Atlanta meeting.
Those meetings are expected to be held prior to the NCCI board meeting, the NAIC's Ms. Lyon said last week. During those sessions, NCCI representatives plan to outline the board's options.
Regulators also want timely information after the NCCI board actually votes on a proposal. As of last week, plans were for NCCI representatives to brief regulators in a conference call about the NCCI's final plan, shortly after the board votes on it, she said. Regulators are willing to exclude outsiders from participating in that conference call, she added. That responds to the NCCI's desire to shield the details of its plans from potential competitors.
However, holding a conference call after the board meeting is new to the NCCI, Ms. Nary said last week. The NCCI will continue discussing arrangements with regulators.
In other action, the NAIC:
Adopted a budget of approximately $40 million for 1997, though they tabled for further discussion a companion resolution that would require the NAIC to change its budget policy by encouraging program budgeting and minimizing subsidies across programs.
Elected new officers, including: Josephine W. Musser of Wisconsin, president; Glenn Pomeroy of North Dakota, vp; and George M. Reider Jr. of Connecticut, secretary/treasurer.
Adopted a bylaws change to ban future past presidents from automatically serving as members of the Executive Committee beyond the first year after their presidency ends.
The Executive Committee consists of the NAIC's three top officers-president, vp and secretary/treasurer-the organization's immediate past president and three elected officers from each of four geographic zones.
Illinois Director Mark Boozell introduced the proposal at a special meeting in January 1996, so the committee would better reflect current members' views, but some commissioners viewed it as a personal attack and delayed action on the proposal.
When the proposal was first introduced, there were three former presidents on the committee, all from the NAIC's southeastern zone: Lee Douglass of Arkansas, the immediate past president; and former presidents Jim Long of North Carolina and Steven Foster of Virginia.
The motion was not passed, however, until the NAIC's meeting last month. The final version of the proposal grandfathered in participation by Mr. Long. The two other ex-presidents had left the NAIC by then or announced plans to do so.
Rescheduled its Executive Committee meetings to Tuesday from Monday beginning with the 1998 spring meeting, while leaving the plenary voting session on Monday. The change is designed to enhance exposure of and deliberation on issues, which must first be passed by the Executive Committee before they are presented to the full membership for a plenary session vote, said NAIC's Ms. Musser.
Established an "industry advisory committee" consisting of a representative of each major insurance trade association and a staff member to meet at NAIC spring and fall national meetings. NAIC leaders will participate and plan to use questionnaires to elicit discussion topics in advance of each meeting, which will focus on three or four topics.
Rejected adoption of the "prudent person" model investment law for insurers and sent it back to committee for further work.
Awarded five-year, second-round accreditation certificates to Kansas, Ohio and North Carolina.
Awarded the Robert Dineen Award, the NAIC's highest personal honor for a career regulator, to Kevin Cronin, the NAIC's director of government and international relations.
Heard the Financial Regulation and Accreditation Subcommittee vote 9-4 to recommend that the NAIC adopt new results-oriented standards for accreditation that reduce the number of model laws required for accreditation by recategorizing several as "supplemental."
The non-essential models include requirements relating to guaranty funds, the Risk Retention Act, producer-controlled insurers, managing general agents, reinsurance intermediaries and disclosure of material transactions.
Supporters of the change argue that it will allow for a more flexible program and enhance state legislative support for it.
Opponents fear that recategorizing some of the model laws, which were adopted to solve problems that caused insurer insolvencies and other market problems, will weaken consumer protections and be viewed negatively by representatives of Congress.