A consumer advocate is asking why the National Association of Insurance Commissioners did not include consumer representatives in a recent meeting that dealt with the future role of states in insurance regulation.
“We are struck by the absence of any consumer organizations in the list of participants” at the 2-day meeting, Birny Birnbaum, executive director of the Center for Economic Justice, Austin, Texas, writes in a letter to NAIC President Sandy Praeger.
“Given that the NAIC’s mantra is that state insurance regulation is all about protecting consumers, we ask if you could explain why no consumer representatives were invited to the meeting and how the NAIC could reasonably get feedback about the prospects of an [optional federal charter] or the future of insurance regulation without the views of the consumers who would be affected by such legislation,” Birnbaum writes in the letter.
The NAIC meeting started here in Washington May 20.
The NAIC, Kansas City, Mo., invited representatives of 4 industry trade groups based here in Washington, and it also invited 3 Democratic congressional leaders.
The NAIC reportedly did not invite representatives of some groups, such as the American Council of Life Insurers, Washington, which have been lobbying for an expanded federal role in insurance regulation.
The NAIC scheduled the Washington meeting as the Treasury Department and lawmakers in the House and Senate are discussing proposals for giving insurers the option to choose between being regulated by existing state agencies or by a new federal insurance regulatory agency.
The NAIC Web site describes the Washington meeting as an “educational” gathering for commissioners.
The site includes a picture of Sen. Ben Nelson, D-Neb., a former insurance commissioner, addressing commissioners and staffers from 42 states.
So far, the NAIC has not described what speakers at the meeting talked about.
Members of the Council of Insurance Agents and Brokers, Washington, have received a report describing the meeting as a session where “commissioners pondered their response to the interesting developments this year over the extent to which the feds should pre-empt state authority.”
Praeger and Walter Bell, the immediate past NAIC President, presided over the meeting, according to the CIAB note to members.
NAIC representatives today declined to comment on Birnbaum’s letter.
Birnbaum says he believe state insurance regulation must modernize.
“However, we are certain that we disagree about what that means,” Birnbaum says. “For industry, modernization means deregulation and an opaque market and regulatory system in which virtually all industry information is non-public.”
For consumer advocates, Birnbaum says, modernization means state insurance regulators who are better able to identify and stop market problems before the problems harm consumers; a vibrant data collection and market analysis system and a more transparent and accountable regulatory structure in which regulators do not routinely jump to jobs with the very entities they once regulated.”