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February 10, 2004 at 07:00 PM
NU Online News Service, Feb. 10, 2004, 5:51 p.m. EST – Sparks are flying over a draft of the National Association of Insurance Commissioners’ white paper on best practices organizations.[@@]
The paper focuses on organizations such as the Insurance Marketplace Standards Association, Washington, that develop standards for the life insurance industry. Insurers have argued that regulators could use membership in IMSA to help determine whether insurers’ market conduct compliance programs pass muster.
Birny Birnbaum, an NAIC-funded consumer advocate and executive director of the Center for Economic Justice, Austin, Texas, is sparring with IMSA Deputy Director Don Walters over the wording of Section 3I of the draft. The section would tie the effectiveness of any best practices organization to recognition of that organization.
Walters argues in an e-mail to the NAIC, Kansas City, Mo., that Birnbaum has misrepresented IMSA’s views on how Section 3I should be worded.
“IMSA would like to be on record to refute the assertion in Birny Birnbaum’s recent correspondence that the attachment to his e-mail message delivered earlier today represents ?CEJ’s suggested language’ on Section 3I of the draft White Paper on Best Practices Organizations,” Walters writes in the e-mail. “The language in the attachment was based upon an initial draft developed by IMSA and modified thereafter through a series of e-mail exchanges with Mr. Birnbaum. Through these e-mail exchanges, IMSA’s initial draft was subsequently modified by Mr. Birnbaum to now comprise what he considers to be ?CEJ’s suggested language.’
“We strenuously object to these tactics as inconsistent with high standards of ethics, good faith and fair dealing. IMSA will submit its proposed language under separate cover.”
When contacted by National Underwriter, Birnbaum said he was puzzled by Walter’s “flaming” reaction. “I’m stunned,” Birnbaum said. “This is really beyond belief. All those accusations are just ridiculous.”
Birnbaum adds that that the Center for Economic Justice and IMSA had made progress on reaching consensus but could not agree on a phrase concerning measuring the effectiveness of best practices organizations on market conduct.
