A pair of states are considering legislation to join the Interstate Insurance Product Regulation Commission, commonly referred to as the "insurance compact."
Created by the National Association of Insurance Commissioners in 2000, the compact reviews and approves (or disapproves) individual and group annuity, life insurance, disability income, and long-term care insurance products.
States steadily joined the compact in the years following its adoption. Then the join rate slowed to a trickle. Only California, North Dakota, South Dakota, Florida, New York and Delaware remain outside the compact, said Pam Heinrich, general counsel and director of government affairs for the National Association for Fixed Annuities.
The Delaware legislature held a hearing on its bill to join the compact last week, Heinrich said during the NAFA Annuity Leadership Forum. New York perennially introduces a bill to join the compact, but it never advances, she added.
"Encouraging states to join this compact is a priority of NAFA," Heinrich said during the virtual event. "So we certainly are encouraging this and it's good to see Delaware has legislation to do just that. And then maybe New York will finally get across the finish line."
Companies have the choice of filing products through the insurance compact or filing products directly with a state. If a company chooses the latter course, then the regulator will apply the existing product standard laws and procedures of the state.
If a company files with the compact, then the compact's uniform standards and review process will apply. Many companies find it more efficient and expeditious to make one filing through the compact for all member states than to make individual filings in each state.
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected] Follow him on Twitter @INNJohnH.
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