Consumer Reps Expand Capital Proposal Battle

New Hampshire Deputy Attorney General Bud Fitch has acknowledged receiving the CFA/CEJ letter but writes that, under the state’s open meeting law, the New Hampshire Superior Court has sole jurisdiction over alleged open meeting law violations.

The attorney general’s office has no role in investigating or prosecuting alleged violations, Fitch writes.

Kofman writes that she has received a copy of the letter sent to the outgoing Maine attorney general, Steven Rowe.

“I share your objections to the Working Group’s decision to close [the Dec. 29] conference call to the public, and I strongly urged the Working Group to have an open call allowing stakeholders and members of the public to hear concerns raised and learn how each state would vote on the specifics,” Kofman writes.

“The objections I have raised influenced the decision to hold a public hearing before taking any final action,” Kofman writes.

Kofman also writes that regulators should avoid regulatory actions that will show that carriers are in a less-than-healthy financial light when, in fact, they are very healthy companies.

“We should be trying to find a balance and help carriers without hurting consumers,” Kofman writes. “I have emphasized that the challenge is how to strike that balance and make sure we are not hurting consumers…. Now, more than ever, we need realistic, accurate financial evaluations. We should be extremely skeptical about making any change now that we would not be just as willing to make in better financial times. And we should make sure that the changes benefit policyholders (not Wall Street).

“When it comes to solvency, regulators should consider changes if there is solid and convincing evidence to demonstrate that some current accounting conventions and capital requirements are duplicative or treat unrealistic worst-case scenarios as likely. The case has not been made to justify such fundamental changes, affecting a multi-billion dollar industry and millions of consumers.”

Kofman also writes that she is “deeply troubled” that expert analysis of technical actuarial and accounting working groups “has been disregarded after it failed to provide enough improvement to insurers’ RBC [risk-based capital] ratios.”

“Quick action with long lasting impact on the market should not trump the need for sufficient analysis to determine the full implications of the proposed changes using a deliberative, open process for such fundamental and important issues,” Kofman writes.

In an interview with CEJ’s Birnbaum, he says that “on this particular issue, it is clear that not only was more public vetting needed but also more information needed to be given to members.

“As a general rule, too many things are discussed out of the public view.”

In response to a request for comment from Sevigny, an NAIC representative said interested parties should read the NAIC’s open meetings policy.