IIPRC Survey: General Satisfaction With Compact, but Lack of Standards a Top Complaint

A recent survey of the companies working within the Interstate Insurance Product Regulation Commission lists general satisfaction with the growing interstate body, though lack of standards and a slow pace of standards development were top complaints.

In the report, almost every company that has been using the filing system expressed satisfaction with it. Their most common product filing has been flexible premium adjustable life products. And according to the report, significantly more than half of submissions are approved in less than 35 days.

The report listed the top three concerns of the companies who have been filing submissions: "Lack of standards, the slow pace of standards development, and getting final agreement"; "confusion regarding state requirements versus IIPRC requirements"; and "possibility of states opting out of standards and standards being subject to unpredictable change."

The Interstate Compact includes 35 states and Puerto Rico -- growing recently with the addition of Missouri. The compact, which welcomed its first members in 2006, establishes uniform standards for life insurance, annuities and long-term care coverage, so far enacting 54 such standards. It also provides a central point for digital filing capability. According to the compact, it covers almost 60% of U.S. premium volume for individual and group life, annuity, long-term care and disability (BestWire, July 14, 2009).

As of August, 63 companies were registered with the commission. The companies, having filed 104 new-product submissions last year, had -- by August -- already filed 144 in 2009, on a pace to double the previous year's number. The firm Milliman conducted the survey to study the experience those companies had in dealing with the compact.

"In just three short years, the IIPRC has evolved into an innovative and efficient process for companies to secure approval in 36 jurisdictions in 60 days, or currently much less time, through a single filing," said Mary Jo Hudson, IIPRC chairwoman and Ohio insurance director, in a statement.

The Milliman report said the main concern for companies not yet registered with the IIPRC "is a perceived negative cost versus benefit ratio. Among companies now making Interstate Compact submissions, however, the general perception regarding IIPRC cost appears to be more positive."

"The only concerns are with the cost and that not all standards are available for filing with the IIPRC," said Whit Cornman, spokesman for the American Council of Life Insurers. "We expect that both of these concerns will be addressed once more standards become available. ... Increasing the number of filings will make the annual registration more cost-effective for companies that, presently, do not make many filings in a given year."