A call to open public access to product filings that are pending approval with the Interstate Insurance Product Regulation Commission was voted down by state insurance commissioners here.
The vote came after insurers warned that amending the current public access policy would make them less likely to use the commission, and a leading consumer advocate called the argument “a sham.” The compact commission is currently trying to increase the number of product filings so the commission will become profitable and self-sustaining.
To date, 117 product filings have been approved in an average of 25 states and an average turnaround of 31 days, according to Frances Arricale, the Commission’s executive director.
Company after company including Aegon, Genworth Financial, John Hancock, Mass Mutual, New York Life, Prudential and UNUM said they would be wary of using a system that would open up new innovative products to competitors. These companies said they have either used the commission to file products or planned to use it in the near future or when more standards are developed.
However, these companies “need to protect intellectual property,” said Michael Lovendusky, representing the American Council of Life Insurers, Washington. Lovendusky was joined by Randi Reichel, representing America’s Health Insurance Plans, Washington, in opposition to the amendment.
But Birny Birnbaum, a funded consumer representative with the National Association of Insurance Commissioners, cited the current financial crisis with American International Group and Wall Street in general as a reason for greater transparency. “The meltdown was due in a large part to the need for greater transparency and greater accountability.” Birnbaum said he was joined by the Center for Insurance Research and the Consumer Federation of America.
He told commissioners that insurers are in effect saying that if state regulators do not do what they want, they will stay away from the commission and “state regulators will look inept to Congress.” But, he continued, “where will this stop?” Will insurers threaten to not use the commission if there is another rule that they don’t like that is put into effect?” he asked.