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Portfolio > ETFs > Broad Market

Birnbaum Asks About Conduct Project Delay

By Jim Connolly

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A consumer advocate is asking the National Association of Insurance Commissioners to answer 8 questions about a market conduct reporting project.

The NAIC, Kansas City, Mo., has been talking about collecting through a market conduct annual statement and storing the data in a central location.

Birny Birnbaum, executive director of the Center for Economic Justice, Austin, Texas, who receives funding from the NAIC to represent consumer interests in NAIC proceedings, has prepared for a July 28 NAIC consumer liaison conference call on the topic by submitting a list of 8 questions.

Originally, the NAIC had planned to adopt a new market conduct reporting system in early June, to give vendors time to prepare market conduct annual statement forms along with the existing financial statement forms.

The NAIC postponed action on the project, then canceled a July 8 conference call.

Here are the questions Birnbaum is asking the NAIC to answer during the July 28 call:

1. What was the reason for the cancellation of the July 8 call?

2. What explanation was given to NAIC members for the cancellation?

3. Who made the decision to not take action on the [Market Regulation and Consumer Affairs (D) Committee] proposal and what was the process for that decision?

4. When was the decision made to not take action on the D Committee proposal?

5. Why did the NAIC take comments only from industry in a conference call before the decision and not seek input from consumer representatives?

6. Why was this decision made in secret and not after discussion in a public meeting?

7. What arguments against the [market conduct annual statement] proposal did the NAIC membership find persuasive and what were the reasons for the NAIC’s decision not to adopt the D Committee proposal?

8. What is the NAIC’s plan, if any, to centralize the collection of, enhance the data elements in and publish MCAS data?

NAIC President Sandy Praeger, the Kansas insurance commissioner, notes in a response that the NAIC has been working on proposals for centralized data collection for many years.

The NAIC “has given consumers, industry representatives, legislators and others multiple opportunities to participate in the process with written and oral comments and at several meetings,” Praeger says.

“We ultimately decided that because of the importance of the proposal and because of the many legal and technical issues raised related to the proposal by our members that it was best to delay a final decision on the matter,” Praeger says.

The committee recommendation is still pending before the NAIC Executive Committee, and the committee looks forward to hearing consumer representatives’ comments during the July 28 call, Praeger says.

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