The National Association of Insurance Commissioners tries to give consumers a voice in its deliberations by paying for consumer representatives to travel to its in-person meetings. (Photo: Thinkstock)

The National Association of Insurance Commissioners may give people not affiliated with consumer groups official permission to serve as NAIC consumer representatives.

The NAIC Consumer Liaison Committee, an arm of the Kansas City, Missouri-based state insurance regulator group, is considering an operating rules update proposal that includes that idea.

Mike Kreidler, the Washington state insurance commissioner and chairman of the liaison committee, prepared the draft in an effort to clarify the consumer rep program requirements.

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The NAIC does not have the authority to change state insurance laws or regulations, but states often use its models as guides when developing their own insurance rules. In some cases, states adopt laws that automatically update the states’ own insurance rules, such as insurance company accounting rules, to incorporate NAIC updates.

The NAIC tries to give consumers a voice in shaping its policies by appointing individuals to represent consumer interests in NAIC proceedings. NAIC appoints two types of consumer reps: funded reps and unfunded reps.

The NAIC waives the NAIC’s own meeting fees for both types of consumer reps. The group covers travel costs for funded reps who attend NAIC meetings in person. The unfunded reps pay for their own travel.

In the rules now in effect, the NAIC assumes that both the funded and unfunded reps represent consumer organizations. Would-be reps who want to join the NAIC Consumer Liaison Committee should state “the name of their organization, its mission, the ways in which the organization is involved in insurance issues, the amount and sources of the organization’s income… and the reasons the organization would like to participate in the NAIC Consumer Liaison Committee,” according to the current committee rules.

The proposed update would let independent individuals serve as consumer reps, and it would let consumer reps who lose their jobs with consumer groups re-apply to serve on the NAIC Consumer Liaison Committee as independent consumer advocates, rather than as representatives for specific consumer groups.

Brenda Cude, a consumer rep who is on the faculty of the University of Georgia, says in a comment on the draft that the update would reflect how the consumer rep program already operates.

She notes that she herself is an independent rep, not a consumer group rep, because the University of Georgia is not a consumer organization.

Birny Birnbaum, another consumer rep, says his group, the Austin, Texas-based Center for Economic Justice, opposes the proposal, because the group believes consumer rep funding should go to support organizations that want to help participate in NAIC discussions, not individuals.

When the NAIC developed the consumer rep program in the early 1990s, “there was a conscious decision to focus on representatives of consumer organizations for designation as NAIC consumer representatives, to ensure the representatives were representing consumers and not merely themselves,” Birnbaum writes. 

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