NAIC "Standard Setting" Becomes an Issue in Maine

“Against the weight of Anthem’s individual product line profitability and Anthem’s company-wide success, the superintendent cited the sworn testimony of nearly 40 Anthem policyholders who indicated that Anthem’s average proposed rate increase would intensify their already difficult individual financial situations and threaten ‘their corresponding ability (or inability) to stay insured’.”

In its brief, filed Oct. 24, the NAIC said it had the right to participate because, “through the NAIC, state insurance regulators establish standards and best practices, conduct peer review and coordinate their regulatory oversight.”

The brief added that, “NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally.”

The NAIC brief said that, “it is clear the superintendent acted within the scope of her discretion in determining the one-year rate increase she approved was not inadequate.”

The brief is important because styled itself as a “standard-setter” in a legal brief in October, before the NAIC staff secured the permission to style itself as such in late December.

At the same time, earlier this week a member of the House Financial Services sent a letter to the NAIC asking it to  explain the legal reasoning behind its decision to describe itself as a “standard-setting organization” rather than a trade group.

The decision to change its designation and to ask for approval of all commissioners was made soon after a public hearing on insurance modernization and regulation convened by the Treasury Department where several of those testifying referred to the NAIC as a “trade group,” which by its legal definition, it is.