State insurance regulators responded to concerns of consumer advocates about conflict of interest of commissioners who play a pivotal role in developing model laws for the National Association of Insurance Commissioners, Kansas City, Mo.
The NAIC’s Oct. 15 letter is in response to a Sept. 24 letter submitted by 11 NAIC funded consumer representatives. That letter had requested that recently adopted revisions to the Viatical Settlement model law be revisited given concerns over allegations former North Dakota Commissioner Jim Poolman had conflicts of interest when he spearheaded the NAIC effort.
Poolman has vehemently denied these public allegations, arguing both the merits of the viatical model and countering that the life settlement industry was waging a campaign against him. He did however acknowledge receiving a 2006 campaign donation from a Sara Bachrach, who he confirmed is the wife of Ira Brody, a partner with InsCap, New York (see NU, Oct. 1). InsCap was involved in discussions during the development of the model, although Poolman maintained there was nothing illegal about the contribution. InsCap is involved in premium financing and not viatical and life settlements, he added. Brody also contributed $15,000 to the North Dakota Republican party in 2006. Poolman is a Republican.
Life settlement and premium financing representatives have vocally disagreed, maintaining that the model did not cover life settlements used through trusts, and this part of the market was omitted from the model. The NAIC is currently looking at the possibility of a new model to cover these transactions as well as new types of transactions that develop.
The NAIC letter reads: “The NAIC is aware that allegations have been made concerning conflicts of interest related to the revisions to the model. The NAIC is addressing the allegations through appropriate channels and evaluating the available facts concerning these issues. You should also be aware that, independent of any issues, related to the Model, the NAIC and its members are currently in discussions concerning revisions to the Conflict of Interest policy. These discussions are ongoing.”
The letter is signed by NAIC leadership. NAIC declined to comment on how allegations are being addressed or to provide details of the conflict of interest policy.
However, several regulatory sources said the policy had been discussed during the Commissioners’ Roundtable at the fall NAIC meeting and that it had been decided to do more work on the proposed changes rather than advance them.