WASHINGTON - A National Association of Insurance Commissioners panel met Tuesday to put the finishing touches on a plan that would make it easier for insurance companies to operate across state lines. The group's board could vote on the plan as early as next month at its fall meeting.

State insurance regulators have been working on the plan for months since enactment of the Gramm-Leach-Bliley Act of 1999, which lets banking, insurance, and securities companies merge. Insurance industry officials have complained that banks have an advantage because they can use national charters, while insurance companies have to be licensed state-by-state. The plan is supposed to be an alternative to calls for a federal insurance charter.

The NAIC panel met in Kansas City, Mo., to review a 12-page proposal that would set size, capital, regulatory, and other requirements for insurers that want to operate nationally. The proposal favors federal legislation to set up the new system, but it could also be accomplished through interstate agreements.

Under the latest draft, an insurance company would have to be operating in at least 25 states and writing at least $100 million of gross annual premiums to be eligible. Among other requirements, it would have to be "exceptionally well capitalized" - which was defined as having $500 million of statutory capital - and meet various operating standards.

Approval would be granted by the company's headquarters state, whose insurance commissioner would serve as primary regulator. A company granted that status could automatically operate in any state, but a single state would have the authority to revoke that power if the company violates its laws.

Further, such insurance companies would have to be examined at least every three years.

It was unclear at press time Tuesday whether the panel had made any revisions. The group's board will discuss, and possibly vote on, the proposal at its quarterly meeting that begins Sept. 10 in Dallas.

The group's board may also vote at that same meeting on standards for enforcing the privacy provisions of Gramm-Leach-Bliley.

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