Arizona Becomes Latest State to Join Interstate Insurance Compact
July 31, 2014 by Thomas Harman
Best’s News Service – July 29, 2014 04:34 PM
PHOENIX – Arizona has become the 44th state to join the interstate insurance compact model, after legislation signed by Gov. Jan Brewer took effect July 24.
The Interstate Insurance Product Regulation Commission provides a place in which insurance companies can offer uniform nationwide insurance products in the areas of annuities, disability income, life insurance and long-term care. The IIPRC officially formed in 2006 after 26 states comprising 40% of the nation’s premium volume adopted the compact model.
In adopting its version, Arizona lawmakers opted out of participating in the long-term care uniform standard. The commission website said any state can pass legislation allowing an opt-out of any standard under the compact for any reason.
Commission Treasurer Joseph Murphy, Massachusetts’ insurance commissioner, said in an email that filers had been interested to see Arizona join, but compact legislation had not been frequently introduced. “We were thrilled to see it pass easily,” Murphy said.
The Federal Insurance Office as part of its insurance industry modernization report last December said state-based insurance product approval should be improved by gaining 50-state participation in the IIPRC and by expanding the products that would be subject to IIPRC approval.
Montana and Arkansas were the most recent states to join the compact, doing so in 2013. Among the eight jurisdictions that are not members are California, Florida and New York. Florida had passed legislation to join the compact, but lawmakers amended it in such a way that the commission cannot consider it a member (Best’s News Service, March 31, 2014).
New York has pending interstate compact legislation, according to the commission website. Senate Bill 2985 cleared the Senate and has been in the Assembly Insurance Committee since early June. “Like Arizona, New York is a state we know filers want to join the compact, so we will do as much as we can to help that happen,” Murphy said.
(By Thomas Harman, associate editor, BestWeek: Tom.Harman@ambest.com)
