In existence for nine years, the US Interstate
Insurance Compact Model aimed at enabling life insurers to file a
single new product application in multiple states has been met with
mixed results. This is evident from a study published by consulting
and actuarial firm Milliman.

In its study, Milliman found that in 2011 132
insurers were registered with the Interstate Insurance Product
Regulation Commission (IIPRC), 58 (78%) more companies than were
registered at the time of its last study in 2009. Thirty of the new
registrations were in 2011.

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According to Milliman, the number of insurers
registered with the IIPRC represents 56% of the US life insurance
industry in terms of volume. This is not an exceptional total given
that, as IIPRC executive director

Karen Z Schutter points out, a single point of
new product filing increases speed to market and reduces
duplicative paperwork and processes. Respondents to Milliman’s
survey registered with the IIPRC reported 45% of product
submissions were approved within 50 days and 90% within 60
days.

Notably, only 65% of insurers fell into the
top two of seven categories of satisfaction with turnaround times.
This was down from 86% of insurers in these two categories in
2009.

When life insurers not registered with the
IIPRC were asked why they are not, the top reason was, notes
Milliman, “perceived costs vs benefits”.

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Also high on the list of reasons for not
having registered was the fact that many key states are not
participants in the insurance compact.

The IIPRC reports that the 41 states that are
currently members of the compact represent about two-thirds of
total US life insurance and annuity premium income. Two significant
states notable by their absence from the compact are New York and
California.