Gov. John C. Carney signed legislation last week making Delaware the 45th state, plus Puerto Rico and Washington D.C., to join the Interstate Insurance Product Regulation Compact.
Created by the National Association of Insurance Commissioners in 2002, 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 and New York now remain outside the compact.
"In the wake of the COVID-19 pandemic, it became clear that consumers across all jurisdictions need ready access to financial protection products offered by the life insurance industry," wrote Vince Ryan, legislative director, State Relations, for the American Council of Life Insurers
"The Compact helps expedite access through its uniform product standard approvals across most states. Since 2007, the Compact has approved more than 8,300 insurance products from more than 300 companies."
In 2020, the Compact adopted its Expedited Review Program for streamlined and faster product approvals, Ryan noted. By joining the Compact, Delaware will:
• Give consumers faster access to competitive insurance products;
• Enhance the efficiency and effectiveness of how insurance products are filed, reviewed and approved; and
• Take advantage of uniformity through the development and application of uniform product standards that contain strong consumer protections.
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.
"The Compact has adopted over 100 uniform standards relating to four product lines – life insurance, annuities, disability income and long-term care insurance," Ryan wrote. "These standards address underlying policies and contracts and their various benefits and features, plus policy applications, enrollment forms, rate schedules, riders and advertising material."
It continues to develop new, and update existing, product standards, including those pertaining to individual life insurance and group annuities.
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.