Market Conduct

  • Market Conduct Surveillance (EX3) Task Force
    • Subgroup on Complaint Information - 1990-1A
    • Subgroup on Life Insurance and Annuities
    • Subgroup on Life Insurance Coupled with Student Loans
    • Subgroup on Life and Health Advertising Issues
  • Market Conduct and Consumer Affairs (EX3) Subcommittee



2. Continue development and study of life insurance products coupled with annuities model regulation.
3. Continue development of amendments to NAIC Model Rules Governing the Advertising of Life Insurance. (p62)

1987-2, NAIC Proceedings

Rules Governing the Advertising of Life Insurance and Life Insurance Products Coupled with Annuities

2016/4/3 - LIIIWG CC, NAIC Proceedings

<Mr. Lovendusky - ACLI> said the ACLI work group thinks that most confusion for consumers involves complex products like universal life, and not Simple products like term life. He said consumers are mostly confused about options, guarantees and riders.

The ACLI work group was considering asking the life insurance and Annuities (A) Committee to narrow the charge to look at only products with options, guarantees and riders, but Ms. Cude said she thinks that it is important to consider how the disclosures for all products could be improved.

"More complex products sold to individual consumers (e.g., universal life policies) tend to generate more market conduct problems than simple products (e.g., term life insurance)." 
2003, "The Path to Reform –The Evolution of Market Conduct Surveillance Regulation," Prepared for the Insurance Legislators Foundation by PricewaterhouseCoopers LLP and Georgia State University

Public interest in various aspects of insurance regulation has risen and fallen over its history, but one area that has remained obscured is market conduct regulation.

2001 - An Assessment of Insurance Market Conduct Surveillance, Robert W. Klein, James W. Schacht  - Journal of Insurance Regulation Vol. 20, No.1

Problems spotted during a market conduct review can be a precursor to financial solvency concerns. 

NAIC Webpage,

Mr. DeAngelo <Commissioner-NJ> said he did not recall seeing incorrect or misleading training materials, so this is somewhat a theoretical question.

Mr. Hanson <Commissioner> responded that he had seen misleading materials in market conduct examinations. 

1999-4 NAIC

Market Regulation and Consumer Affairs (D) Committee
Market Actions (D) Working Group 
Market Analysis Procedures (D) Working Group
Market Conduct Annual Statement Blanks (D) Working Group
Market Conduct Examination Standards (D) Working Group
Market Regulation Certification (D) Working Group
Privacy Protections (D) Working Group

Market Conduct Annual Statement (MCAS) collection system

Market Conduct Regulation Guidelines Working Group of the Market Conduct and Consumer Affairs (EX3) Subcommittee, NAIC Proceedings 1995 4th Quarter

c. Adopt Recommendation for Market Conduct Examination Oversight (EX3) Task Force as NAIC Standing Technical Committee

Commissioner Weaver asked Mr. Chartrand to review the proposal. Mr. Chartrand said that the proposal for a standing Market Conduct Examination Task Force had been reviewed as Item #2 in the minutes of the Oct. 11 Washington, D.C., meeting. Mr. Chartrand reiterated the reasons set forth in those minutes for the recommendation that this standing task force be put in place beginning in January 1991. He stated a copy of the actual proposal is included as Attachment Eight-A to the Oct. 11 minutes. Pete Synnott, as chair of the advisory committee, stated to the subcommittee that there was a consensus by the advisory committee that this proposal was a terrific idea. He felt that it would advance communications between both state examiners as well as the companies being examined. Mr. Rogers asked that it be noted in the minutes that it would be his recommendation that
with the adoption of this proposal it be made absolutely clear that this be a permanent standing task force and that it should also appoint its own advisory committee for input on examination
issues. This need is particularly important as the subcommittee would continue to focus on issues of policy, law and model legislation while the new task force would be concentrating on matters directly related to the examination processes. Mr. Synnott replied that he concurred and that he had already been approached by members of the industry interested in serving on such an advisory committee.

1991-1A, NAIC Proceedings

A preliminary meeting of the Market Conduct Task Force was held at the Zone III meeting in Springfield in October.
Those in attendance were Commissioners Hudson, Lussem, Markman, O'Connor and Foudree. Also present was Laura
Sullivan, Chair of the advisory committee. At that meeting there was a general discussion of the objectives which the task force should pursue, A number of possible areas for consideration in regard to market conduct examinations were mentioned, including the following:
1. Examination funding standards,
2. Examination skills relating to market conduct, for example, development of uniform standards to test market
conduct performance,
3. Revision of the NAIC Market Conduct Handbook,
4. Creation of a system for surveillance of claims handling,
s. Establishment of an "Annual Statement" for market conduct or some form of annual performance statement,
6. Inquiry into alleged abuses of the market conduct examination process and ways to correct or prevent such abuses,
7. Development of a questionnaire to survey Regulators and industry about concerns with market conduct examinations.  (p317)

1981-1, NAIC Proceedings 


2005-2 NAIC Proc.

  • Responding To Market Conduct Problems (Section VI)
  1. Self-Audits

States may monitor company self-audits. "Best practices" organizations or independent standard-setting organizations, such as IMSA in the life insurance industry, promote self-audits or self-evaluative activities and mandate corrective actions on the part of their members.

New Jersey MetLife adoptrptmetlife.pdf

In its June 7, 1994 Consent Order #94-102, the NJDBI cited N.J.S.A. 17B:30-3 and N.J.A.C. 11:2-23.4 and subsequently fined MetLife $965,555 for MetLife’s practice of misrepresenting life insurance to be retirement or savings plans, particularly in advertisements sent to nurses and other professionals.