NU Online News Service

HOUSTON-- The National Association of Insurance Commissionerswinter meeting here heard state legislators, insurers and consumeradvocates urge the organization to make their process more open tothe public.

At a session of the NAIC's industry liaison committee, insurerscalled for greater transparency in the way the NAIC developstestimony for Congressional hearings.

Their comments followed another NAIC liaison meeting, this onewith consumer representatives, who recommended that commissionerspursue a policy of open meetings to ensure better participationwhen policy issues are being developed.

Deidre Manna, a representative with the Property CasualtyInsurers Association of America (PCI), Des Plaines, Ill., noted anNAIC estimate that the organization testifies on insurance issuesbefore Congress between 30-50 times a year.

She asked if the NAIC has a process for approving the positionsit takes during testimony. "If there is one that is moreformalized, we'd be interested in hearing about it. But, if that isnot what is taking place, we'd like to urge you to formalize [theprocess.]"

Marsha Harrison, representing the National Association of MutualInsurance Companies, in Indianapolis, said there are three types ofNAIC activity that concern industry members.

The first instance, she says, occurs when NAIC Congressionaltestimony is in conflict with what working groups and committeesduring the NAIC are doing. A second case, according to Harrison, iswhen a single commissioner speaks his or her individual views, butNAIC publicity makes it appear as if the testimony represents theorganization. "The fact that a person is testifying on his own islost in the translation."

A third situation, she added, is when a news release praises anact in Congress when the NAIC has not adopted a position. Harrisoncited the Klein-Mahoney Homeowners Insurance bill on catastrophefunding.

"The threshold question is 'what is the process and is ittracking with what NAIC working groups are doing," Dave Snyder, arepresentative with the American Insurance Association, Washington,stated. "Secondly, if there is diversity [of opinion] in theregulatory community, how can that be expressed?"

Michael McRaith, Illinois insurance director and chair of theindustry liaison committee, said that e-mails are exchanged andthere is a discussion among members so that commissioners have achance to look at testimony. Then it is used, he said.

But Mary Jo Hudson, Ohio insurance director, disagreed using theKlein-Mahoney bill, the Home Owners' Defense Act, as an example."There is a very involved process for model laws but where there isdivergent views, it appears the NAIC as a whole had a positionwhere only certain parts of the NAIC [were considered.] It was adone deal by the time it was circulated."

Commissioner Hudson said on a number of occasions an NAICposition has not reflected her state's stance on the issue.

Mr. McRaith in response said the Homeowners' Defense Act hadbeen the subject of a briefing and Power Point presentation by U.S.Rep. Tim Mahoney, D-Fla., at the NAIC fall meeting and it wasdiscussed by the NAIC property-casualty "C" committee. So, theposition should not have been a surprise, he continued.

The issue of greater public access to all NAIC meeting sessionswas raised during the consumer liaison meeting by three consumerrepresentatives.

Former Indiana insurance commissioner Sally McCarty, nowinsurance and advocacy specialist with Hemophilia of Indiana; DonMorrison, executive director with the North Dakota Center for thePublic Good and Brendan Bridgeland, director with the Center forInsurance Research all called for a new policy on openmeetings.

What is "particularly disturbing," according to Ms. McCarty, isthe lack of openness in the model law process, the NAIC's "mostimportant product."

Mr. Bridgeland recognized that there are legitimate reasons toclose meetings when there are solvency discussions for individualcompanies that could cause a "run on the bank situation."

But, he continued, it is important to have tight guidelines andavoid new names such as "regulator-to-regulator" for meetings thatare still closed.

"It is important that there be policy deliberation," he said,adding that he doesn't believe "pure policy matters warrantsecrecy."

During the session, consumer advocates invited the head of theNational Conference of Insurance Legislators to offer his views onopen meetings.

Rhode Island State Rep. Brian Kennedy, D-Hopkinton, the newNCOIL president, in April of this year raised the issue of opensession and worked with NAIC to establish a legislative liaisoncommittee.

Mr. Kennedy noted that progress had been made but that therewould be over four months until the spring NAIC meeting, sufficienttime to restructure meetings so that they could be open and closedat the end of sessions, if company issues were raised.