Advocates: Put Market Conduct Information In Financial Filings

Members of a panel at the National Association of Insurance Commissioners are pondering whether insurers should include market conduct reports with their annual financial statements.

The Market Regulation and Consumer Affairs Committee of the NAIC, Kansas City, Mo., held a discussion about the topic here at the NAIC’s spring meeting.

The committee could decide by April 15 whether to forward a market conduct inclusion proposal to the NAIC’s executive committee.

The executive committee and the plenary, a body that includes all NAIC voting members, would have to approve the proposal before the NAIC would recommend it.

Insurers are resisting the proposal and warning that it could turn the annual statement into a catchall.

In addition to expressing concern about the idea of combining non-financial information with financial information, insurers also are asking about the confidentiality of the market conduct data that would be included in the reports.

Regulators and consumer advocates, on the other hand, say including the market conduct information in annual statements will help them assess insurers and improve regulatory oversight.

The market conduct annual statement was initiated in 2002 and became permanent 2 years later.

Recently, Ohio, which had been spearheading the effort since its inception, notified the NAIC that it would not continue to do so.

The NAIC is considering both adding the information to the annual financial statement and creating a central repository for the market conduct data.

The NAIC has received a comment letter about the topic from a group of insurance trade organizations that includes America’s Health Insurance Plans, Washington; the American Council of Life Insurers, Washington; the Blue Cross and Blue Shield Association, Chicago; and several property-casualty insurer groups.