Rep. Ed Royce, R-Calif., who has emerged recently to call the NAIC to the carpet with respect to its stated authority and identity, said Wednesday that he still has problems with the NAIC’s response that it is not a regulator.
Royce expressed that he has disagreement on “several issues,” notwithstanding its assertion that it is a 501(c)(3) association without “regulatory authority.”
He was referring to a March 20 response letter the NAIC President and Florida Insurance Commissioner Kevin McCarty sent in reply to a Royce demand.See: //www.lifehealthpro.com/2012/03/21/naic-clarifies-its-role
Specifically, Royce, a senior House Financial Services Committee member a few notches under Chairman Spencer Bachus, R-Al, who Royce once challenged for the chairman position, mentioned two multi-state market conduct examinations.
These are significant, according to Royce because they have been seemingly overseen, in his view, by the NAIC, so thus done in a regulatory capacity, although others noted that was an accreditation/Dingell-era complaint, which some day is outdated, and others think reveals a vibrant argumentthatthe NAIC acts as a regulator.
The first relates to a $10 million settlement reached after an 18-month “targeted NAIC multi-state market conduct examination of Allstate’s claims-handling practices, as announced in part by the then-New York State Insurance Superintendent James J. Wrynn in October 2010. The second instance named by Royce was another multi-state exam announced by Washington State regulators which bears similar language in that it was an NAIC effort.
This second case is likely a national, multi-state market conduct examination of The HealthMarkets, Inc., (formerly UICI), and its affiliated companies that found multiple problems involving consumer disclosures, oversight and training of agents, claims handling, and complaint-handling practices.
The Washington State notice states the exam was “initiated in 2005 by the National Association of Insurance Commissioners (NAIC) and led by Washington State Insurance Commissioner Mike Kreidler and Alaska Division of Insurance Director Linda Hall. Thirty-three states and the District of Columbia participated in the examination.”
In both those instances, the NAIC was indeed taking regulatory action, Royce contended to NU.
Royce spoke to National Underwriter Life & Health after a luncheon presentation here in Washington at an insurance regulatory reform seminar, the 8th Annual Networks Financial Institute Summit in association with Indiana State University and corporate sponsors.
“He would be incorrect,” retorted Susan Voss, NAIC immediate past president and Iowa insurance commissioner, regarding the charge that the NAIC had been assuming a regulatory position in the multi-state exams. McCarty, in his letter, sanctioned the NAIC membership’s coordination of exams, as was most recently done with Prudential Insurance on the Death Master List/unclaimed property issue. http://www.lifehealthpro.com/2012/03/07/prudential-agrees-to-17m-unclaimed-property-settl
Voss was also speaker at the conference as well, and is no stranger to Washington and the international insurance regulatory arena. Voss, who spoke early in the morning, sat through Royce’s presentation, although Royce only appeared at lunchtime for his address.
“States come together, “to work together to do data calls, surveys,” and on exams, Voss said to reporters. “I wouldn’t characterize the NAIC as doing market conduct exams.”
Royce asked in his late February letter to the NAIC whether the NAIC was private, not-for-profit, or a “standard setting regulatory agency. See: http://www.lifehealthpro.com/2012/02/28/naic-standard-setting-rule-questioned?utm_source=LifeHealthProDaily&utm_medium=eNL&utm_campaign=LifeHealthPro_eNLs
“The NAIC emphasizes that it is a ‘private group’ when questions come up regarding its accountability and transparency, then just as quickly play up its role in ‘forming the national system of state-based insurance regulation in the U.S.’ These two positions seem, at the least, inconsistent,” Royce stated in talking points from his speech Wednesday.