SAN ANTONIO, TEXAS–Consumer advocates rating the work of the National Association of Insurance Commissioners during its winter meeting here announced that most of the efforts got passing grades.

The consumer representatives listed report card results for issues ranging from health and long-term care to market analysis.

All of the group are “funded consumer representatives” who are given a stipend to attend NAIC meetings.

On property-casualty issues, funded representative Birny Birnbaum said the NAIC delivered a “good performance” on catastrophe insurance issues, but noted the inconsistency of trying to fend off federal regulation and yet look to federal programs such as the federal flood program for support.

And, on the market regulation segment, Mr. Birnbaum urged that the NAIC expand its market analysis because the NAIC has “argued that in order to fend off federal regulation, state regulators have to be closer to the market 'pulse.' Market regulation gives you an advantage.”

He noted that there were 19 data elements for market conduct analysis and 240 data elements for financial statement analysis. He also expressed disappointment in the market conduct model and added that the market regulation area was the smallest part of the NAIC budget.

However, Mr. Birnbaum did say he believed “you do have consumers in your interest at all times. I have never failed to believe that you are trying to protect consumers.”

Susan Voss, Iowa insurance commissioner and chair of the Market Regulation and Consumer Affairs “D” Committee, said that strong financial solvency protections for companies were ultimately strong consumer protections as well.

Mr. Birnbaum said the efforts of the NAIC for life insurance and annuities, excluding the Compact which he described as a separate entity, were “very good.”

He assigned a “very good” grade to work on the Viatical model measure that would curb the sale of insurance that is strictly for settlement, although he said he did not agree with all the specifics in the proposal.

He assigned a “very good” to the principles-based reserving project for “trying to ensure that term life is made available and affordable to consumers.”

On the issue of the Interstate Insurance Product Regulation Commission, Mr. Birnbaum said he was “greatly disappointed” because of issues such as public accountability and public access.

Mila Kofman, another funded consumer representative, gave the NAIC's Unauthorized Transaction of Insurance Criminal model act a “B-plus” and described it as a “strong step” in reining in agents for selling insurance of unauthorized insurers including health insurance programs.

Ms. Kofman gave the NAIC an “A” for its response to the Health Care Choice Act but an “F” for its response to S.B. 1955, a small employers' health insurance bill–also known as the Enzi bill for U.S. Senator Mike Enzi, R-Wyo. She said that for the 20-plus commissioners, including Washington Insurance Commissioner Mike Kreidler, who actively opposed the bill, their grade was an “A.”

Funded consumer rep Karrol Kitt lauded the NAIC for programs including Insure U, an effort to educate consumers about insurance, and noted that the NAIC has an opportunity to build on that work since a General Accounting Office report indicates that of 20 federal agencies that promote financial literacy and education, none offers education focusing on insurance.

A grade of “incomplete” was proposed for NAIC efforts on consumer disclosures by funded representative Brenda Cude, who cited “truly groundbreaking efforts” but said that more work needs to be done. The “incomplete”, according to Ms. Cude, will become an “F” if no further advancement is made by the end of 2007.

Bonnie Burns, a funded consumer rep who retired from her position at this meeting, noted disappointment with the level of agent training in the revised Long-Term Care model act and regulation, noting the fact that there are only eight hours of initial training and four hours of training every two years, and also that the LTC Partnership training is not broken out from LTCI training.

Special Reports /

NAIC Gets Consumer Report Cards

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