A public access rule adopted by the Interstate Insurance Product Commission is raising concern among commissioners in several key states. The rule was adopted when the commission met at the winter meeting of the National Association of Insurance Commissioners here. Florida, Hawaii, Ohio and Texas were states that expressed concerns about the rule, including the exemption of a product filing from public access until it has been approved by the commission, if the filer maintained that trade secrets were part of the filing.
Florida Insurance Commissioner Kevin McCarty submitted an e-mail on Dec. 6 to the Compact management committee stating that “as presently drafted, the rule will serve as a major–and perhaps insurmountable–obstacle to our ability to pass the Compact law.” McCarty expressed the hope that wording could be developed that would allow the Florida department to pursue enactment of the Compact in Florida.
According to the McCarty memo, the problem–as was discovered in 2005, when a bill was introduced to enact the Compact in Florida–was that the legislature felt there was potential for conflict with the state’s public access laws. McCarty writes that although the department would like to be able to introduce a bill to enact the Compact in 2007, the Compact’s public access provision “confirms concerns raised in the past that the consumer protections provided to Floridians in our constitution and laws would be jeopardized.”
Deputy Commissioner Rich Robleto explained after the Compact meeting that until the department is comfortable that the rule conforms to Florida’s laws, it cannot introduce the bill to the legislature, which in the past has expressed doubt over the provisions.
Ohio Director Ann Womer Benjamin asserted that “the input of all parties is important for a public filing.” Public access and comment following that access would not impede the filing process, she said.
Birny Birnbaum, a consumer representative for both the Commission and the NAIC and 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 the public does not know what is being filed, it cannot intelligently comment on the filing; and if it does not comment, then it loses that chance to have its voice heard, he explained. There is no evidence, he added, that filings would contain trade secrets that would hurt companies.
While the American Council of Life Insurers, Washington, wants to work with Florida to enact the Compact, “it is very important to the industry to adopt the public access rule today,” said Michael Lovendusky, an ACLI representative.
Policy standards adopted by the Commission on Dec. 8 are for the following products: 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.