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Life Health > Health Insurance

A Letter to Our Readers

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On Monday, the 11/22 issue of National Underwriter Life & Health will “hit the stands,” as we say, meaning that the first print copies will begin to arrive on people’s desks, and the electronic version of the issue will go live on our website (

The reason why I am drawing your attention to this is because our next issue is a special one, dedicated almost entirely to raising questions about the National Association of Insurance Commissioners. Or as I like to think of it, the most powerful organization in insurance that nobody really knows anything about.

The NAIC is a strange organization. It is a nonprofit group composed of public officials, yet it has huge business interests throughout the industry, particularly in the compilation and sale of insurance data. It cannot lobby in Washington, but the influence it wields gives it the same sort of ability.

When the Dodd-Frank bill sought to create a powerful Federal Insurance Office, it was the NAIC that led the charge to de-fang it. It may not have lobbied like every other special interest, but it can definitely make its voice be heard.

Ostensibly, the NAIC does everything that it does for the benefit of the consumer. But as one colleague in the industry pointed out to me, if that is so, why is it pro-consumer to force insurers to wrangle with 50 different insurance regimes, when the cost of that gets passed along to the policyholder? It is a point I had often wondered about.

Just as I often wondered about the NAIC’s real motivations for fighting the FIO. There are, I have been told, some 35,000 jobs tied up in the state regulatory regime. The money the NAIC earns speaks for itself. What we have here is a very powerful organization that can and will fight for its own self-preservation first, and for the benefit of its mission second. That, I find troubling.

Just as troubling is the fact that the NAIC is transparent except when it chooses not to be. A private group, it is only as beholden to the public as suits its purposes. So far, the NAIC hasn’t really abused this too badly–though reporters I speak with openly grouse over how impenetrable NAIC meetings can be to understand.

But ultimately, the NAIC, for all of the power and influence it wields, remains below the radar of many in the industry. Few actually have a good understanding of how the organization works on a daily basis. And that’s a dangerous thing.

But why?

To me, the NAIC’s power, versus public awareness of it, reminds me of that military-industrial complex that President Eisenhower warned us about all those years ago. Whenever you get a group with that kind of power and that dearth of accountability, it’ll fight tooth and nail to preserve itself, even if it means running counter to the public good.

Personally, I felt the NAIC did just that when it fought against federal insurance regulation, because the state model does not offer a compelling argument that it’s any more efficient than what a federal version of it would be. All I see right now is inefficiencies, extra costs imposed on the industry, and inconsistent standards enforced throughout the country.

That’s not good for insurers. That’s not good for sales distribution. That’s not good for policyholders.

And that is why I devoted our next issue to examining the various elements of the NAIC: the argument for its model; how it makes its money; the lobbying that goes on within the NAIC itself, and the way in which the NAIC makes its decisions.

These are all things that the insurance press has never really covered before. And I am proud at what the National Underwriter staff has accomplished with this very special issue.

I hope you will take a look at our next issue on Monday, and I especially hope that as you go through it, if you have any comments or thoughts to share, please do so, either on our website, or by sending letters directly to me at [email protected].

Perhaps the biggest reason why we investigated the NAIC was to provide you, the reader, with something worth talking about with your fellow readers. The National Underwriter Life & Health readership makes up one of the most influential and savvy bodies of thought leaders in the life and health industry. What you say and how you say it is important. And we want the whole world to know what it is–so sound off!

Thanks for reading, and for your continued support.

Bill Coffin, Editor-in-Chief

National Underwriter, Life & Health


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