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NAIC Panel Member Seeks to Clear Regulatory Pipes

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What You Need to Know

  • The working group hopes to develop a framework consumers can use to compare life products.
  • Birnbaum says the working group was nearly done in March.
  • He says the NAIC Life Committee then put the working group in limbo in August.

Birny Birnbaum is trying to pull a Life Illustration Issues Working Group report through the pipes at the National Association of Insurance Commissioners.

Birnbaum is asking the working group’s parent, the NAIC’s Life Insurance and Annuities Committee, to release the report, which is about new standards for materials that show how specific life insurance policies work.

The Life Committee began implying in August that the working group has taken too long to complete its work, but that’s because the Life Committee failed to answer a working group question posed in March, Birnbaum says.

If the Life Committee had simply answered the question, the working group would already be done, Birnbaum says.

Birnbaum is director of the Center for Economic Justice. He helps represent consumers’ perspective in NAIC proceedings.

The Life Insurance Illustration Issues Working Group

The working group has been trying to develop standards for charts and other materials that life insurers can to create standardized materials showing how their products might work.

Working group members hope the new illustration standards will help consumers understand life insurance policies better and make comparing policies easier.

The Life Committee Response

The working group presented a nearly complete report to its parent, the NAIC’s Life Committee in March. The only major concern seemed to be disagreement over whether consumers ought to get the comparison materials before they bought their coverage or after, Birnbaum writes in a letter sent to Marlene Caride Friday.

Caride is commissioner of the New Jersey Department of Banking and Insurance and chair of the NAIC’s Life Committee.

The Life Committee took no apparent action on the life illustration working group’s report until August, when it suddenly discussed discarding the report, Birnbaum says.

“We protested, and the committee continued to place the WG’s [working group's] efforts in limbo,” Birnbaum writes.

Instead of telling the working group to finish its work, or giving the working group specific advice about the illustrations delivery timing question, “the committee directed the WG [working group] to provide a report of its activities over the past five years, to set the table for a discussion on whether the WG should complete its charge or be abandoned by the committee,” Birnbaum says.