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Consumer Reps Ask NAIC To Change Model Rules

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Funded consumer representatives at the National Association of Insurance Commissioners are urging the organization to rethink its new system for screening model law proposals.

The consumer reps wrote to the National Association of Insurance Commissioners, Kansas City, Mo., Sept. 10 to explain why they think the screening system, announced last spring, is bad both for consumers and for the NAIC.

The letter was signed by Brendan Bridgeland, executive director of the Center for Insurance Research, Cambridge, Mass.; Birny Birnbaum, executive director of the Center for Economic Justice, Austin, Texas; Mila Kofman, associate research professor with the Health Policy Institute at Georgetown University, Washington; and, Bill Newton, executive director of the Florida Consumer Action Network, Tampa, Fla.

The consumer reps write in the letter that there was no public discussion about the change in policy and that the new model law procedures “continue to wreak havoc at the working group and committee level.”

The consumer reps ask NAIC leaders, including NAIC President Walter Bell, why the procedures were changed and why these changes were done in executive session without public input.

Bell, who is the Alabama insurance commissioner, says the new screening system will lead to more uniformity in state standards and require the commissioners who vote for models at the NAIC’s executive committee and plenary sessions to commit more resources to implementing the models.

The new screening system requires two thirds of commissioners to vote for a model before the model can be adopted, and the system also requires commissioners to commit to getting models adopted in their own states.

“Despite the NAIC routinely presenting itself as an organization of public officials–either in letters and testimony to Congress and governors or through agreements with public officials of other countries–the NAIC operates like a private organization without the public records or public meeting requirements that apply to its individual members,” the consumer reps write in their letter.

“The fact that a model law is not adopted by a majority of the states does not mean that the model law has not affected policy development in the states,” the consumer reps write. “Many NAIC models establish standards for consumer protection that are influential in state legislative development.”