CIAB Hopes NAIC Task Force Reins In State Actions
NU Online News Service, Nov. 4, 1:02 p.m. EST?The Council of Insurance Agents & Brokers said it hopes the creation of an insurance commissioners' task force in response to the insurance brokerage fees scandal will limit moves by the individual states.
In a letter to the president of the National Association of Insurance Commissioners, CIAB President Ken A. Crerar said his group is hopeful formation of the group would have a "calming effect" on states planning separate actions. Brokerage fee arrangements are currently being investigated in New York, California, Connecticut, New Jersey, Ohio and Florida.
Mr. Crerar wrote that his group welcomes a unified response by regulators to the insurance brokerage fee scandal and praised National Association of Insurance Commissioner's President Diane Koken, who is Pennsylvania Insurance Commissioner, for her leadership in forming the task force.
The 13-state task force is assigned the responsibility of creating a model law on transparency of commission payments to brokers, a unified questionnaire for carriers on the fee question and creation of a hotline to report wrongdoing.
Mr. Crerar said the association is "deeply troubled by the serious allegation of bid-rigging and fraud" alleged by New York Attorney General Eliot Spitzer against Marsh & McLennan Companies, Inc., adding that such acts have no place in the industry and those who committed crimes should be punished.
He reminded Ms. Koken that contingent commissions have been a legal and proper form of payment for many years.
"Creating a task force of high-ranking officials to look into these serious allegations is a cautious and reasoned response, and we hope this initiative will have a calming effect on individual states that might be considering acting on their own," he said."
Mr. Crerar expressed the fear that without the NAIC's intervention there may be a series of conflicting regulations among the states that would do more harm than good.
He said the Washington, D.C.-based association would like to meet with commissioners at their December meeting in New Orleans, or at any other time to discuss the issue further.
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