Birny Birnbaum has come up with a list of sample situations that could help National Association of Insurance Commissioners consumer representatives avoid potential conflicts of interest.

The regulators at the NAIC, Kansas City, Mo., and the Consumer Board of Trustees, a panel that oversees individuals who receive NAIC funding to represent consumers in NAIC proceedings, are trying to develop a policy that would prevent funded consumer reps from taking payments that could create conflicts of interest.

The issue surfaced after the NAIC adopted a conflict-of-interest policy for commissioners in March.

Birnbaum, a funded consumer rep and executive director of the Center for Economic Justice, Austin, Texas, stepped up after regulators and consumer board members said someone should develop compensation arrangement examples that could be used to develop funded rep compensation guidelines.

Birnbaum is offering the following examples:

- Compensation from regulated entities in the form of travel expense reimbursement to speak to a trade association of regulated entities (such as insurers, reinsurers or producers).

- Compensation from regulated entities in the form of travel expense reimbursement to testify on behalf of the individual or her organization on an issue before a state legislative or administrative body or other policy-making entity, such as the NAIC or the National Conference of Insurance Legislators, Troy, N.Y.

- Compensation from regulated entities in the form of travel expense reimbursement to testify on behalf of the individual or the individual’s organization on an issue before a federal legislative or administrative body or other policy-making entity, such as the NAIC or NCOIL.

- Compensation from a best practices organization in the form of travel expense reimbursement for serving on the board of directors of the best practices organization.

- Compensation from a regulated entity in the form of travel expense reimbursement for serving on the board of directors of the regulated entity.

- Compensation in the form of an individual honorarium or other payment for time spent in addition to the travel expenses.

- Compensation in the form of an organizational honorarium or other payment for time spent in addition to the travel expenses.

- Compensation in the form of a contribution for general support of an organization from regulated entities comprising less than 5% of the organization’s budget, less than 10%, less than 15%, less than 20%, less than 25%, less than 30%, less than 40% or less than 50%.

- Compensation in the form of payment from a regulated entity for services provided to the regulated entity to ensure compliance with state and federal laws by the regulated entity.

- Compensation in the form of a payment for withdrawing an objection to a class-action lawsuit settlement to improve the settlement for consumers.

- Compensation in the form of payment for services for testifying on behalf of the individual, the individual’s organization or the regulated entity before an legislative, administrative or other policy-making entity.

- Compensation in the form of a grant to fund research by the individual or the individual’s organization.

- Compensation in the form of a payment unrelated to specific regulatory issues or actions, such as travel expense reimbursement to attend a conference.

Birnbaum asks questions about the possible guidelines, such as whether these examples represent conflicts of interest, and whether the existence of these sorts of compensation arrangements would require disclosure or some other form of action.