Policies of openness and transparency need to be advanced by the National Association of Insurance Commissioners, legislators, insurers and consumer advocates urged during the organization’s winter meeting here.
A call for greater transparency over how the NAIC develops testimony for Congressional hearings was made by insurers during the industry liaison committee. The call followed a consumer liaison meeting in which NAIC funded consumer representatives recommended that commissioners pursue a policy of open meetings to ensure better participation when policy issues are being developed.
Referencing an NAIC estimate that the organization testifies before Congress between 30-50 times a year, and noting that it will continue to be asked to speak out on insurance issues, Deidre Manna, a representative with the Property Casualty Insurers Association of America, Des Plaines, Ill., asked if NAIC has a process for approving positions it makes during testimony. “If there is one that is more formalized, we’d be interested in hearing about it. But, if that is not what is taking place, we’d like to urge you to formalize [the process.]“
There are 3 categories of situations that give rise to concern, according to Marsha Harrison, representing the National Association of Mutual Insurance Companies, Indianapolis. The first instance, she says, occurs when NAIC Congressional testimony is in conflict with what working groups and committees during the NAIC are doing. A second case, according to Harrison, is when a commissioner speaks as an individual but NAIC publicity makes it appear as if the testimony represents the organization. “The fact that a person is testifying on his own is lost in the translation.”
A third situation, she added, is when a news release praises an act in Congress when the NAIC has not adopted a position. Harrison cited the Klein-Mahoney Homeowners Insurance bill on catastrophe funding.
“The threshold question is ‘what is the process and is it tracking with what NAIC working groups are doing,” Dave Snyder, a representative with the American Insurance Association, Washington, stated. “Secondly, if there is diversity [of opinion] in the regulatory community, how can that be expressed?”
Michael McRaith, Illinois insurance director and chair of the industry liaison committee, said that e-mails are exchanged and there is a discussion among members so that commissioners have a chance to look at testimony. Then it is used, he said.
But Mary Jo Hudson, Ohio insurance director, disagreed using the Klein-Mahoney bill as an example. “There is a very involved process for model laws but where there is divergent views, it appears the NAIC as a whole had a position where only certain parts of the NAIC [were considered.] It was a done deal by the time it was circulated.” And, Hudson continued, there are a number of times when a position was not a reflection of Ohio’s position.
She said that when you compare the Klein-Mahoney bill with the treatment of the State Children’s Health Insurance Program, that bill “did not receive NAIC applause. This is a very valid point and I appreciate the comments.”
McRaith responded, stating that U.S. Rep. Tim Mahoney, D-Fla., spoke during the fall meeting of the NAIC in Washington, and went through a Power point presentation of (H.R. 3355) the Homeowners’ Defense Act of 2007. After, the issue was addressed by the property-casualty “C” committee, he said. So, the position should not have been a surprise, he continued.
The issue of openness was raised during the consumer liaison meeting as funded consumer representatives Sally McCarty, insurance and advocacy specialist with Hemophilia of Indiana, Indianapolis, and also a former insurance commissioner from Indiana; Don Morrison, executive director with the North Dakota Center for the Public Good, Bismarck, N.D.; and Brendan Bridgeland, director with the Center for Insurance Research, Cambridge, Mass., called for a new policy on open meetings.
What is “particularly disturbing,” according to McCarty, is the lack of openness in the model law process, the NAIC’s “most important product.”
Bridgeland recognized that there are legitimate reasons to close meetings when there are solvency discussions for individual companies that could cause a “run on the bank situation.” But, he continued, it is important to have tight guidelines and avoid new names such as “regulator-to-regulator” for meetings that are still closed.
“It is important that there be policy deliberation,” he said, adding that he doesn’t believe “pure policy matters warrant secrecy.”
During the session, consumer advocates invited state Rep. Brian Kennedy, D-Hopkinton, R.I., and the new NCOIL president, to offer his views on open meetings. Kennedy first raised the issue in April of this year and was able to work with NAIC to establish a legislative liaison committee. Kennedy noted that progress had been made but that there would be over 4 months until the spring NAIC meeting, sufficient time to restructure meetings so that they could be open and closed at the end of sessions if company issues were raised.
ISSUED 11/30/2007 FOR IMMEDIATE RELEASE
NEW YORK STATE INSURANCE DEPARTMENT REQUESTS UNITEDHEALTHCARE POSTPONE CONTROVERSIAL POLICY ROLLOUT
The New York State Insurance Department announced today that it has requested UnitedHealthcare to delay implementation of its new policy to require hospitals to provide notice within 24 hours after a patient has been admitted. The Department has requested the delay to ensure that the policy complies with Insurance Law and that the policy will not have an adverse impact on consumers or the delivery of health care services.
United’s policy will impose a penalty of up to 50% of normal payment if the hospital fails to notify United within 24 hours after a patient is admitted. There are no exceptions to this policy, even for weekends or holidays when the hospital’s business office may not be fully staffed.
“We are concerned that United’s 24-hour notice requirement may be in violation of laws protecting consumer access to emergency services,” said Insurance Superintendent Eric Dinallo. “The Department has had several productive meetings with United regarding the policy, and we have met with major New York hospital associations to investigate how the policy will affect hospitals on the ground. We are requesting United delay implementation of the policy so that the company can provide us requested information addressing the concerns we have raised.”