A critical study by a state legislators' group has found that the National Association of Insurance Commissioners engages in expanded activities with no state controls.

The examination of the NAIC, sponsored by the National Conference of Insurance Legislators, reviewed the NAIC “and its amoeba-like tendency to grow unfettered and without direct state control for their actions,” noted Rhode Island State Rep. Brian Patrick Kennedy, D-Hopkinton.

Mr. Kennedy, the NCOIL vice president, said that Phase One of the study performed by the Insurance Legislative Foundation delivered at last week's NCOIL meeting raised troubling questions.

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

The study aims at defining the strengths and weaknesses of state regulation and the challenges it faces from critics who feel it hampers competitiveness in today's environment, according to NCOIL.

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

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

NAIC President and Alabama Insurance Commissioner Walter Bell said the draft document on the NCOIL site is incomplete and depends heavily on unnamed or industry sources.

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

Special Reports /

Report On NAIC Activity Irks Lawmaker

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