NAIC Weighs Meeting Department Options Following Clean Sweep

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The National Association of Insurance Commissioners is weighing several options following a clean sweep of its meetings department.

Among the options being considered are outsourcing the function and rebuilding the department, according to Andy Beal, general counsel for the Kansas City, Mo.-based group.

Beal emphasizes that the department still exists and that “we dont think that it will be disruptive to the national meetings, interim meetings or the educational seminars.”

Two employees resigned and the remaining four employees were terminated, according to Beal.

Four to six weeks ago, an internal review of the department began and “we discovered a violation of the NAIC conflict of interest policy,” Beal alleges.

The result of the review found that staff had “inappropriately accepted incentives from outside vendors,” Beal alleges.

The review centered on meeting planner points, he says, and NAIC has a policy restricting such activity.

When asked if all the six former staffers had accepted these points, Beal responded, “most of them” did and “there were problems in other areas.”

“It was a matter of applying policy across the board and making sure that all employees receive equal treatment,” according to Beal. “We are looking at internal controls to make sure that it doesnt happen going forward.”

And, he adds, NAIC will make sure that going forward all employees have a “clear understanding” of the policy regarding rewards and perks.

When asked if NAIC was considering outsourcing in 2003, Beal responds, “we werent necessarily considering it early on.”

But, he adds, the organization always is looking for ways to conduct business more efficiently.

“It is an internal management decision. Quite frankly, there were members of the department that [took action] we considered to be unethical conduct,” says NAIC President and South Carolina Insurance Director Ernst Csiszar. “That wont be tolerated.”

At press time, affected former staffers could not be reached for comment.


Reproduced from National Underwriter Life & Health/Financial Services Edition, February 6, 2004. Copyright 2004 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.