A critical study by a state legislators' group has found thatthe National Association of Insurance Commissioners engages inexpanded activities with no state controls.

The examination of the NAIC, sponsored by the NationalConference of Insurance Legislators, reviewed the NAIC “and itsamoeba-like tendency to grow unfettered and without direct statecontrol for their actions,” noted Rhode Island State Rep. BrianPatrick Kennedy, D-Hopkinton.

Mr. Kennedy, the NCOIL vice president, said that Phase One ofthe study performed by the Insurance Legislative Foundationdelivered at last week's NCOIL meeting raised troublingquestions.

The report, he said, “is a great first step” in providing athorough and comprehensive review of the NAIC.

The study aims at defining the strengths and weaknesses of stateregulation and the challenges it faces from critics who feel ithampers competitiveness in today's environment, according toNCOIL.

Mr. Kennedy in the past few months has been a steady critic ofNAIC operations and has led a drive to open up sessions of the NAICthat have been closed to the public, arguing they should be open toscrutiny because they discuss matters of public policy. The studyneatly fits in with his critique of the group.

“How has this nonprofit organization known as the NAIC managedto create a dedicated revenue stream of state assessments based onpremium volume of domestic insurers when no other private nonprofithas a similar ability to extract assessments against our states?”he said to the NU Online News Service.

NAIC President and Alabama Insurance Commissioner Walter Bellsaid the draft document on the NCOIL site is incomplete and dependsheavily on unnamed or industry sources.

“I don't believe it is appropriate to make additional commentsuntil the document is further developed,” he said.