NAMIC Rips NAIC Broker Disclosure Plan

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NU Online News Service, March 25, 3:40 p.m.EST?The National Association of Mutual Insurance Companiessaid it opposes the National Association of Insurance Commissionersamendment to broker compensation disclosure rules, calling it"confusing and ambiguous."[@@]

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The Indianapolis-based carrier association said it had sent aletter noting its misgivings to NAIC President Diane Koken, whoalso chairs the executive task force on broker activities.

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"Overall, we continue to view the Compensation DisclosureAmendment, as adopted [in December], as being overbroad, confusingand ambiguous, and of limited value to the consumers it is intendedto protect," wrote NAMIC State Affairs Manager Christian JohnRataj.

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His letter also addressed supplemental questions NAIC has askedabout additional amendments to the disclosure act. NAMIC contendsthat any model act adopted by the NAIC should:

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? "Be grounded in logic and
reason, not fear and speculation.

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? "Be realistic in scope and practical in application.

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? "Be narrowly tailored to the objective of preventing conflictsof interest

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? "Be mindful of the fact that a well-drafted regulation shouldalways balance the needs of the consumer with the needs of theinsurance industry."

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NAMIC said its hope is that the NAIC will consider narrowing thescope of the amendment so that it addresses only "actual"conflict-of-interest situations, such as when a producer is beingcompensated by both the customer and the insurer or anothersource.

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Short of those changes, however, NAMIC urged the NAIC to adoptthe March 5, 2005 NCOIL Producer Compensation Disclosure ModelAmendment to the Producer Licensing Model Act, and add noadditional disclosure requirements to the amendment.

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That proposal limits itself to producers compensated by both theinsured and insurers.

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