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Insurers, Consumer Reps Call For Open NAIC Meetings

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The American Insurance Association and the Center for Economic Justice both want to hear more about new model development rules at the National Association of Insurance Commissioners.

The AIA, Washington, represents insurers, and the Austin, Texas-based economic justice center speaks for consumers.

Representatives for both organizations said here at the summer meeting of the NAIC, Kansas City, Mo., that they have concerns about recently adopted NAIC procedures that will give the NAIC’s executive committee the authority to separate model development efforts with broad, deep support from other model efforts.

Measures that appear to have strong support from two-thirds of NAIC members will advance as models, and the other measures will advance as “guidelines” that simply represent “best practices,” under the current rules.

The NAIC developed the changes in the procedural rules during closed meetings, and that indicates a failure by the NAIC to involves its stakeholders, according to Birny Birnbaum, an economic justice center representative who gets NAIC funding to represent consumer interests at NAIC meetings.

Birnbaum asked why the NAIC used closed executive sessions to make the changes in NAIC procedures.

Birnbaum called on the NAIC to hold a public hearing on the issue and to use the feedback offered during that hearing to make a decision about whether to proceed with changes in the model law development procedures.

The new procedures may have merit, but because stakeholders did not have the opportunity to listen to discussions about why they should be implemented, there is no way to determine that, Birnbaum said.

Dave Snyder, an AIA spokesman, asked for clarification about the legal significance of any measures that would be approved as “guidelines” rather than as “models.”

NAIC President-elect Sandy Praeger, the Kansas insurance commissioner, said her organization wants to decide quickly whether to develop a model rather than spending 2 years on developing models that may have little effect on state laws or regulations.

“Change is difficult, and we all recognize that it is natural to have some resistance,” Praeger said. But “we don’t have the luxury of spinning our wheels on a model that doesn’t go forward.”