What happens to the DOI without NAIC accreditation

[JMO Fan]

If a state fails to adopt a model law (or a revision) that is on the list of NAIC models required to be adopted, they will lose accreditation. That means other states are not obligated to accept that state's certifications, e.g., of financial exams and domestic company reserves (by their agreement as part of the NAIC). One state that I worked for in the past was required by the NAIC to employ a qualified actuary to review their domestic-company financials (which is why they hired me, which did turn out to be the only obstacle to NAIC accreditation).

[Gareth Keenan]

So the only negative repurcusions to the state DOI, beyond not having efficient solvency regulation, are on the domiciled insurers. Interesting. It seems that there is an indirect negative repurcussion to the DOI, in that future insurers will not choose to be domiciled in the state. Or existing insurers could choose to be domiciled elsewhere resulting in a loss of jobs in the state, and loss of whatever fees domiciled insurers need to pay. Interesting.

[Vorian Atreides]

Insurers may even opt to not do business in the state at all ==> decreased revenues for the DOI/state (no premium tax collected).

Certainly isn't going to be good for someone's political career.

[Ron Weasley]

Keep in mind that without some sort of coordination between state regulations, there would be more pressure to move toward federal regulation of insurance rather than state regulation, which threatens the well being of state regulators, including insurance commissioners. So, each insurance commissioner has some motivation to encourage his/her state legislators to pass laws that aren't too dissimilar from other states. The vehicle for this has been the model regulations developed by the NAIC and the creation of the certification program for a state.

[Take 2]

A non-accredited state suffers an extreme lack of clout with the NAIC. They also risk a public perception that they're incompetent. Inter-state rivalries and pressure from other state agencies compound the pressure.

[llcooljabe]

Originally Posted by JMO

Actually, there's a list of NAIC model laws/regs that a state must adopt. I wasn't even aware of additional hoops to jump through. Oh and by the way, it is my understanding the New York is currently the only state lacking NAIC accreditation.

Sadly, having dealt with the NYDOI extensively, frustrations make a whole hell of a lot of sense now.

I thought the frustrations were just a part of dealing with DoI's in general...

[Brad Gile]

Originally Posted by llcooljabe

Sadly, having dealt with the NYDOI extensively, frustrations make a whole hell of a lot of sense now.

I thought the frustrations were just a part of dealing with DoI's in general...

New York has always been a tough state to deal with.

[JMO Fan]

Accreditation accelerates actuarial uniformity among the states.