The NAIC issued a model law on long-term care insurance. Which statement about the model law's effectiveness is correct?

The NAIC issued a model law on long-term care insurance. Which statement about the model law's effectiveness is correct?

• A. The model law becomes effective in a state if approved by the state legislature and the governor signs it into law
• B. The model law must be enacted by federal legislation to become effective
• C. The model law becomes effective only after a state budget is passed
• D. The model law becomes effective in a state if approved by the state legislature

Answer: (D)

NAIC model laws are recommendations states may adopt to guide insurance regulation. The key point is that a model law becomes effective in a state once the state legislature approves it and enacts it as law. The governor’s signature isn’t the defining step in this context, since adoption by the legislature is what makes the model legally binding at the state level. Federal legislation isn’t involved because insurance regulation is primarily a state matter, and the state budget doesn’t determine when or whether a model law takes effect. So the best answer is that the model law becomes effective in a state if approved by the state legislature.

NAIC model laws are recommendations states may adopt to guide insurance regulation. The key point is that a model law becomes effective in a state once the state legislature approves it and enacts it as law. The governor’s signature isn’t the defining step in this context, since adoption by the legislature is what makes the model legally binding at the state level. Federal legislation isn’t involved because insurance regulation is primarily a state matter, and the state budget doesn’t determine when or whether a model law takes effect. So the best answer is that the model law becomes effective in a state if approved by the state legislature.