The Interstate Insurance Product Commission has adopted a rule that could keep members of the public from seeing product filings while the filings are under review.
The IIPRC, Washington, has included the public access exception in a new public access rule approved here at the winter meeting of the National Association of Insurance Commissioners, Kansas City, Mo.
The exception would exempt a product filing from public access until the IIPRC approved the filing if the filer said the filing included trade secrets.
The IIPRC is responsible for administering the new Interstate Insurance Product Regulation Compact.
Michael Lovendusky, a representative for the American Council of Life Insurers, Washington, spoke in favor of the public access trade secrets exception.
“It is very important to the industry to adopt the public access rule today,” Lovendusky said.
Officials from Florida, Hawaii, Ohio and Texas expressed concerns about the public access exemption provision.
“As presently drafted, the rule will serve as a major, and perhaps insurmountable, obstacle to our ability to pass the compact law” in Florida, Florida Insurance Commissioner Kevin McCarty warns in a comment sent to the IIPRC’s management committee Wednesday.
Florida lawmakers have suggested in the past that public access restrictions included in a product regulation compact bill might conflict with the state’s public access laws, McCarty writes in the comment.
The new compact public access exception “confirms the concerns that were raised in the past that the consumer protections provided to Floridians in our constitution and laws would be jeopardized,” McCarty writes.
Birny Birnbaum, executive director of the Center for Economic Justice, Austin, Texas, said “fundamental public accountability is a tool for consumer advocates” and a “litmus test for whether they can support the compact.”
If members of the public do not know what is being filed, they cannot intelligently comment on the filing, and if they do not comment, then they lose that chance to have their voice heard, Birnbaum said.
There is no evidence that filings would contain trade secrets that would hurt companies, Birnbaum added.
Also at the IIPRC meeting:
- The IIPRC management committee rejected a request by Birnbaum to let the IIPRC consumer representative board nominate potential consumer rep candidates and present the candidates to the management committee for approval. The management committee voted to retain the right to nominate and appoint consumer representatives.
- The IIPRC approved standards for: flexible-premium adjustable life; modified premium variable adjustable life; modified single-premium adjustable life; joint last-to-die survivorship flexible premium adjustable life; and joint last-to-die survivorship flexible-premium variable adjustable life.
One provision lets life insurers add a fraud exclusion to the policy incontestability period if the state in which the policy is delivered or issued has a law permitting insurers to include such an exclusion.
“Allowing state exceptions is contrary to the compact,” Birnbaum said.
The fraud exclusion provision is “anti-consumer” and adding it “undermines the compact’s ability to achieve speed-to-market reforms,” Birnbaum said.