The National Association of Insurance Commissioners should answer tough questions about what it is and the true scope of its authority, according to a senior member of the House Financial Services Committee.
Rep. Ed Royce, R-Calif., who is also chairman of the House Foreign Affairs Committee, said in a speech before the National Risk Retention Association in northern Virginia that NAIC has been schizophrenic, with NAIC officials telling the industry, members of Congress and federal regulators “that they are not a regulatory body. They are an association made up of regulators.”
“On the other hand,” he added, “they impose their will on companies – and states – through national accreditation standards … while representing the United States in international negotiations on rules they have no ability to enforce on a uniform basis.”
Royce said the House FSC should examine the issue.
An NAIC spokesperson said the association had no comment at this time.
Royce has also been highly critical of the NAIC’s use of a Delaware-based business to provide state-regulatory officials with travel money so they can spread the gospel of state regulation. Royce said his analysis is that this company, called NAIC-Newco, will provide state-insurance officials with $1.3 million in travel funds this year.
“I do not think it is too much to ask that the $80 million trade association define who it is and what it can do…but of course tough questions draw criticism,” Royce said.
Royce also discussed the long-awaited regulation modernization report being crafted by the Federal Insurance Office, explaining that he sees it “as a watershed moment for future regulation” of the insurance industry.