A consumer advocate is criticizing the National Association of Insurance Commissioners, Kansas City, Mo., for not asking consumer representatives to participate in a meeting held here on May 20-21 to discuss the future role of states in insurance regulation.
“We are struck by the absence of any consumer organizations in the list of participants” at a meeting held to discuss how state insurance regulation can be improved, Birny Birnbaum, executive director for the Center for Economic Justice in Austin, Texas, said in a letter to NAIC president Sandy Praeger.
Mr. Birnbaum said that, “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 OFC or the future of insurance regulation without the views of the consumers who would be affected by such legislation.”
The NAIC invited representatives of four industry trade groups based here, as well as three congressional leaders, all Democrats, to hear their views on how state regulation can be improved.
It came against the background of a Treasury report released in late March that called for a greater federal role in insurance regulation as part of a broader modernization of financial services regulation, as well as legislation introduced in both the House and Senate that would create an optional federal charter for insurance.
And in the first reaction to the Treasury report, legislation was introduced in the House April 14 that would implement the Treasury report’s call for an Office of Insurance Information within the Treasury Department as a potential first step toward legislation creating an optional federal charter.
The meeting on May 20-21 was listed on the NAIC website as an “educational” gathering for commissioners. A picture of Sen. Ben Nelson, D-Neb., a former insurance commissioner, addressing the group of commissioners and staff from 42 states has been placed on the NAIC website.
However, no information as to what was talked about was provided.
According to information on the meeting provided to members of the Council of Insurance Agents and Brokers, it was a “day-and-a-half session when commissioners pondered their response to the interesting developments this year over the extent to which the feds should pre-empt state authority.”
Those presiding, according to the CIAB note to members, were Praeger, and last year’s NAIC president, Alabama commissioner Walter Bell.
The NAIC today declined to comment on the letter to it from Mr.Birnbaum.
Mr.Birnbaum added that he agreed with comments by David Sampson, president and CEO of the Property Casualty Insurers Association of America, Des Plaines, Ill., that state insurance regulation must modernize.
“However, we are certain that we disagree about what that means,” Mr. Birnbaum said. “For industry, modernization means deregulation and an opaque market and regulatory system in which virtually all industry information is non-public.”
For consumer advocates, Mr. Birnbaum said, “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.”