As the Interstate Insurance Product Regulation Commission organizes itself, one clear message is being sent by commission constituents: Make decision-making an open process.
It was a message that Diane Koken, chair of the Interim Management Committee and Interstate Insurance Product Regulation commissioner, responded to in opening comments during a public hearing held here at the fall meeting of the National Association of Insurance Commissioners.
“We are working to find our own process–the right process. The public had and will continue to have the opportunity to participate in the management committee and the commission itself.”
But, it was a concern that the consumer, legislative and industry advisory committees of the compact reiterated.
That message was reinforced by an amendment to the commission bylaws made by commission states, led by Ohio and supported by Texas, Vermont and Washington. Ohio’s Insurance Commissioner Ann Womer Benjamin made the motion which was unanimously adopted.
The proposal, among other points, opened meetings of a committee or subcommittee, and required that any proposal, idea or concept recommended to the management committee have at least 1 public meeting by that committee or subcommittee before advancing that proposal.
The proposal, according to Womer Benjamin, would permit input at an earlier stage for the public and other stakeholders.
In an interview, Womer Benjamin said that an open meetings process was critical to the acceptance of the Commission and its work.
This is a “creature of state law” and as such, there needs to be an open process and the ability to provide comment at an early stage, she said.
Without a more open process, Womer Benjamin, who is a former legislator, said that she believed state legislators would react negatively to the Commission.
“This Compact has the potential for greatly improving and making the life insurance industry more uniform which would benefit consumers across the country,” she said. But, Womer Benjamin continued, for that to occur, there has to be an open process from the start of the product approval process.
The consumer advisory committee started the testimony. The non-public aspect of meetings was criticized as well as the structure of the way comments were processed.
Failure to have committee and subcommittee meetings made public would “promote expediency over public accountability,” according to Birny Birnbaum, executive director of the Center for Economic Justice, Austin, Texas. He said that it is “mystifying” as a public official that language in the commission bylaws would not ensure meetings are open.
“A different approach” to rulemaking hearings was also suggested by Birnbaum. That approach, according to Birnbaum, would start with the commission reviewing comments and recommending changes prior to a hearing so that the discussion would advance the issue.
A requirement that 25 persons were needed to request a public meeting at which they could present oral testimony was one called “a meaningless hurdle to have in place” by Brendan Bridgeland, director of the Center for Insurance Research, Cambridge, Mass.
Michael Lovendusky represented the views of the industry committee. Lovendusky, associate general counsel with the American Council of Life Insurers, was also representing America’s Health Insurance Plans, the National Association of Insurance and Financial Advisors, and Mass Mutual Group. ACLI and AHIP are based in Washington, NAIFA, in Falls Church, Va., and Mass Mutual, in Springfield, Mass.
During his comments, Lovendusky said that industry supports the Ohio proposal because it advances public access.
Among suggestions that are being made by the industry committee is that “a meeting of the Commission means a gathering of 4 or more members of the Commission for the purpose of discussing or taking action upon Commission business.” The proposed industry change eliminated the word “prearranged” from gathering and substituted “4 or more” for “the majority of” members.
Lovendusky discussed 2 more recommendations: wording regarding the commission committees not being required to have open meetings, and a provision allowing a commission vote by electronic means.
Both Texas Rep. Larry Taylor and Kansas State Sen. Ruth Teichman, representing the commission’s legislative committee, reinforced the need for open meetings. Both Taylor and Teichman also outlined how the legislative committee should be structured.
Scott Gilliam, assistant vice president with Cincinnati Insurance Companies, Cincinnati, noted that without an open meeting process, legislators in Ohio who are apprised of the meetings procedures “may wonder whether the passage of the Compact was a wise action.”
The legislative committee structure is included in a new draft just released by NAIC and scheduled to be considered with other changes on Sept. 27.
The legislative committee will consist of 8 state legislators from compacting states. 4 legislators will be appointed by the National Conference of State Legislatures, Denver; and, 4 will be appointed by the National Conference of Insurance Legislators, Troy, N.Y.