NU Online News Service, Jan. 9, 2004, 5:39 p.m. EST – The National Conference of Insurance Legislators, Albany, N.Y., has cut a whistleblower protection provision from the latest draft of its Market Conduct Surveillance Model Act.[@@]

NCOIL released the draft Tuesday. Comments on the draft are due Jan. 15.

Supporters of the whistleblower provision say the provision would make it easier to encourage people to report market conduct wrongdoings. Opponents say many states already have their own whistleblower provisions.

Representatives for 2 key consumer groups disagree about the importance of the change.

In general, the NCOIL model does an “excellent job” of balancing consumer and industry interests, according to Kevin Hennosy, a consumer advocate and publisher at SpreadtheRisk.org, Kansas City, Mo.

The removal of a whistleblower provision should not have a major impact on insurance regulation because so many states already have whistleblower laws, Hennosy says.

If a need for a whistleblower provision does develop, a separate model can be created, Hennosy adds.

But Birny Birnbaum, executive director of the Center for Economic Justice, Austin, Texas, says the whistleblower provision is important and should be put back in the model because it can help regulators identify agents who are not acting properly.

The current model “is a grab bag for insurers for putting up roadblocks in front of regulators,” Birnbaum says.

What the model should be doing, according to Birnbaum, is making sure that there is a minimum level of resources for regulation and making sure that the commissioners get the information that they need.