A law firm hired by the National Association of Insurance Commissioners says the NAIC used an open, objective process to develop the Viatical Settlements Model Act, NAIC officials report.
The law firm found that “the model was accorded open debate and unbiased consideration,” and that the process the NAIC’s Life Insurance and Annuities Committee used to adopt the model was unbiased and not subject to undue or improper influence, according to the NAIC, Kansas City, Mo.
“We were confident going into the review that the model amendments had been subjected to thorough and open debate, and we have been looking forward to confirmation of those facts,” NAIC President Sandy Praeger, the Kansas insurance commissioner, says in a statement about the investigation. “We can now focus on getting this model introduced and adopted by the states.”
The Kansas City, Mo., office of Bryan Cave L.L.P. conducted the investigation.
At press time, Lynn McCreary, the partner at the firm who led the investigation, could not be reached for comment.
The firm “reviewed the [viatical model development] process to see if it was … open and deliberative and … that members made decisions based on information received from all sides,” says NAIC spokesman Scott Holeman.
Firm representatives interviewed the 12 members of the NAIC’s Life Insurance and Annuities Committee, Holeman says.
Representatives for several groups involved in the life settlements market and related sectors say the officials who conducted the internal investigation have not interviewed them.
At press time, information was not available about whether the investigators had used documents other than meeting minutes.
Consumer group representatives who receive NAIC funding to speak for consumers at NAIC proceedings raised questions about possible conflicts of interest at the NAIC in September 2007, in a letter that suggested that some commissioners, such as former North Dakota Insurance Commissioner Jim Poolman, the former chair of the Life Insurance and Annuities Committee, might be too close to the life settlements industry and the life insurance premium finance industry.
The authors of the letter asked about the possibility that Jim Poolman may have received campaign contributions from at least one industry participant while he was overseeing development of the viatical model.
Poolman, who now runs a consulting business in Bismarck, N.D., welcomed the investigators’ findings.
“I am not surprised with the results,” Poolman says. “I have always known there were no conflicts of interest. This is something just ginned up by those in the viatical settlement industry who don’t want to be further regulated. I am disappointed by their tactics, but it comes with the territory. There was a lot of hard work and effort put into this legislation by many, and I am glad that I and the process have been vindicated.”
Representatives of trade groups, producer groups and consumer groups expressed a wide variety of views about the NAIC’s announcement of the investigation results.