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Irritation With NAIC Surfaces At NCOIL Meeting

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State legislators’ irritation with the National Association of Insurance Commissioners surfaced here at many points during the summer meeting of the National Conference of Insurance Legislators.

One result of this was adoption of a resolution “opposing certain executive sessions of public policy officials.” The resolution was a reaction to reports of the NAIC, Kansas City, Mo., holding some of its meetings in closed session and not allowing state legislators to attend or participate. The resolution, cosponsored by all of the leaders of NCOIL, Troy, N.Y., refers to what the authors describe as “a consistent, long-standing NAIC practice of closing meetings for reasons beyond those accepted by Open Meeting Laws.”

The resolution urges the NAIC “to conduct all meetings, to the extent appropriate, in open session,” and also “encourages state legislatures to amend their state Open Meetings Laws…to address specific concerns regarding state officials attending out-of-state meetings of national organizations.”

Another point of contention–the NAIC’s accreditation program–arose in a session on NCOIL-NAIC dialogue.

Rhode Island Superintendent Joseph Torti called accreditation “a shining star that has help to preserve the state regulatory system.”

While NCOIL has been critical of “the hasty addition of models to the accreditation program, only four new models have been added to the program since 1999,” Torti said.

Since 1997, NCOIL has expressed the need for a 3-year exposure period for any model being considered for the accreditation program as well as the need for 26 states to approve a model before it becomes an accreditation standard, said Rhode Island state Rep. Brian Kennedy, D-Hopkinton, R.I.

Kennedy charged that the NAIC has reduced the exposure time to 1 year. NCOIL, he said, believes “this hurry-up process is not in our best interest and that in many cases we don’t know the full impact.”

Torti said the prevailing idea at the NAIC is to see how many states adopt a model during the exposure period. If not many do, then a model would not likely become an accreditation standard, he said.

In response, New York state Sen. James Seward, R-Milford, N.Y., asked for the creation of a formal rule stating that a majority of states must adopt a model before the NAIC will add the model to its accreditation program.

After listening to NAIC spokesman Andrew Beal talk about the NAIC’s new policy on model laws, Kennedy said the policy “was adopted in a closed conference call” and that the process at the NAIC “has become a concern.”

Kentucky state Rep. Robert Damron told Beal that “most of the legislators are going to have a hard time with your model laws if they’re done behind closed doors. Meetings should be open.”

Kennedy then remarked that he is “very disappointed that we don’t have at least one member of the NAIC leadership present at this meeting, as has been promised to NCOIL in the past.”

Kennedy said he spoke to NAIC President Walter Bell regarding state legislators being shut out of certain NAIC meetings.

Bell said he thought the issue would “die down on its own, but the press got hold of it and sensationalized it,” Kennedy reported.

Bell told Kennedy that there will be badge changes for legislators at NAIC meetings as well as a stronger effort by the NAIC to work more closely with state legislators, Kennedy said.

Kennedy said he suggested that time be set aside for an NCOIL-NAIC dialogue at NAIC meetings.

Bell replied that he thought “it was a fantastic idea,” Kennedy said.