WASHINGTON BUREAU — A consumer watchdog is asking the new National Association of Insurance Commissioners (NAIC) retained asset account unit for details about RAA oversight.
Birny Birnbaum, executive director of the Center for Economic Justice, Austin, Texas, is trying to find out whether any RAAs are insured by the Federal Deposit Insurance Corp. (FDIC) and how a state guaranty fund could protect an RAA holder.
“Given that the insurer has, presumably, paid the death benefit and the consumer has transferred the benefit to an RAA, why and how would the guaranty fund cover an RAA of a failed insurer?” Birnbaum asks.
Birnbaum also is asking whether a guaranty fund has ever paid a consumer for an RAA account provided by a failed insurer. “If yes, under what circumstances?” he asks.
Other topics Birnbaum is addressing include the number of RAAs in place; changes in the number of RAAs and the RAA asset total over time; the median amount of time that consumers keep funds in the accounts; and whether any state has disapproved an RAA agreement for any reason.