Compact Support Splintered As NAIC Primes For A Vote
Reaction to an interstate compact model that would create a single point of filing for life insurance products is splintered, as interviews and statements from regulators, consumer advocates and the American Council of Life Insurers, suggest.
A vote to enact an interstate compact model by the National Association of Insurance Commissioners is tentatively set for Oct. 23.
The NAIC vote would follow an announcement by the ACLI, Washington, at its annual meeting in San Diego that it unanimously supports the September 27 compact draft (see page 41.) It would also follow a discussion of the issue earlier this month by regulators (see page 33.)
At press time, consumer advocates were ready to formally oppose the draft.
It lacks public accountability and transparency, as well as consumer representation, says Birny Birnbaum, executive director of the Center for Economic Justice, Austin, Texas.
And a provision that would preempt authority to change compact decisions, including judicial review, is “tort reform beyond the wildest dream of tort reformers,” Birnbaum continues (see page 33.)
Bonnie Burns, director of consumer education with California Health Advocates, Scotts Valley, Calif., calls the preemption “stealth tort reform. It is the most alarming piece of information [in the compact] that I think I have seen.”
The draft locks in standards on long-term care that are out of date compared with more updated standards that now exist in some states, she continues. “It could erase well established consumer protections across the board.”
Burns also questions the “rush” to enact the compact before the November elections. Are regulators trying to do now, what they may feel that they cant do afterward, she asks.
The AARP, Washington, has expressed concerns about the strength of the compacts standards. However, at press time, a representative could not be reached for comment.
Reproduced from National Underwriter Life & Health/Financial Services Edition, October 21, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.