Swaps, Market Conduct Top Agenda of the Spring meeting NCOIL

 

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20 February 2009 Friday 10:48 AM EST

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Swaps, Market Conduct Top Agenda of the Spring meeting NCOIL

Raymond J Lehmann

WASHINGTON



As the National Conference of Insurance Legislators return next week to Washington for the spring meetings of the group, they could launch a new offensive in the state by federal legislation by saying battle states authority to regulate credit default swaps in front of federal efforts to do the same.

Set to be a hearing on February 28 before NCOIL for Financial Services and Investment Products Committee, swaps have played a major role in the failure of American International Group Inc, as well as in the disturbances in financial guarantees as insurers MBIA Inc. and Ambac Financial Group. Largely unregulated because the provisions of the nine years, Commodity Futures Modernization Act that exempted from the state gambling and bucket shop laws, swaps have always been regarded as derivatives, and efforts are underway to create the control of them at the federal level by the Commodity Futures Trading Commission, U.S. Securities and Exchange Commission or the Federal Reserve.

But New York State Member Joseph D. Morelle, D-Rochester, who will chair the hearing NCOIL, Congress earlier this month in its view that, when used as a hedging device, the products are a form of credit or guarantee financial insurance, and should be regulated as such in the state (BestWire, 4 February 2009). NCOIL already held a special meeting on the subject, January 24 in New York, and instructed the committee Morelle of formulating an official position.

"Our court has laid the foundation for action and NCOIL the committee must decide on the form and strategy of this action," said Morelle. "Members May inform the federal government on a 'holistic' approach, or to create a solution that could be based on uniform legislation or, perhaps, an international compact. "

The group will also return to the issue of market conduct annual statements, an issue that has caused friction between NCOIL and the National Association of Insurance Commissioners, with the consideration of a model law by MCM NCOIL State Federal Relations Committee. Under the model, sponsored by Chairman James Seward NCOIL, data and analysis from the statements on the market should remain confidential privileged, and it establishes rules for when such data could be shared by states with other entities, including the NAIC.

Also on 27 February, the group health, long-term care and Health Issues Committee of retirement will hear arguments on the practice of "balance billing" patients for unpaid outside the network medical expenses.

"We have heard that insured patients are charged more often balanced by providers who work in hospitals or emergency rooms that do not contract with insurance companies that these institutions", the President of committee, the Vermont state Senator Ann Cummings said. "These inconsistencies can leave patients without knowledge of their financial responsibilities. In addition, emergency room patients May not be able to make these distinctions.

The committee will hear from Louisiana Insurance Commissioner James Donelon, America's Health Insurance Plans, the National Association of Health Underwriters and the American Medical Association, among others.

(By RJ Lehmann, director of the Washington office: raymond.lehmann @ ambest.com)

21 February 2009

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