Consumer representatives are expressing outrage over what they say is a “revolving door” that the National Association of Insurance Commissioners is failing to address.

Fourteen reps who get funding from the NAIC, Kansas City, Mo., to speak for consumers in NAIC affairs today sent all commissioners a letter criticizing the movement of state insurance commissioners, including several recent past presidents of the NAIC and NAIC committee heads, to positions with companies that they had previously regulated.

Citing an announcement earlier this week that Alabama Insurance Commissioner Walter Bell will take a position with a U.S. subsidiary of Swiss Reinsurance Company, Zurich, the consumer reps call on the NAIC “to institute a strong conflict of interest policy which includes a prohibition against lobbying the NAIC or other insurance regulatory bodies — including foreign insurance regulators and the [International Association of Insurance Supervisors, Basel, Switzerland] — for a period of two years following departure from public service.”

“We also ask that the NAIC specifically adopt a resolution asking Mr. Bell not to lobby the NAIC, the IAIS or foreign regulators for a period of two years from his departure,” the reps write.

The reps note that a second past NAIC president, Al Iuppa, the former Maine insurance director, took a job with Zurich Financial Services Group, Zurich, and that a third, Ernest Csiszar, the former South Carolina insurance director, took a job with the Property Casualty Insurers Association of America, Des Plaines, Ill.

“The movement of regulators to industry feeds the perception that NAIC leadership positions are a stepping stone to future industry employment,” the consumer reps write. “Instituting a strong conflict of interest policy with revolving-door safeguards would help erase that image and strengthen state regulation of the insurance industry.”

Birny Birnbaum, a funded consumer rep and executive director of the Center for Economic Justice, Austin, Texas, said in an interview that the movement of commissioners to industry jobs provided by the companies they regulate undermines the argument that state regulators are truly looking after consumer interests.

When insurance commissioners have testified in Congress in support of maintaining states’ current jurisdiction over insurance regulation, they have asserted that state regulators are in the best position to protect consumers.

The revolving-door issue raises the possibility that state regulators may be taking some of the actions they take to burnish their images so that they will be employable by industry when they leave state insurance regulation, Birnbaum says.

Birnbaum says one example may be the willingness of regulators to accept arguments for delaying a market conduct analysis project and market conduct annual statements because of insurers’ concerns about confidentiality.