Continuing our discussion about regulation, the National Association of Insurance Commissioners stepped on a hornet's nest this week with its proposal to collect market conduct data as part of the annual statement process–then keep it in a central data base. Consumer groups are all for it, but insurers fear more class-action suits and tipping off competitors to proprietary information. No matter what happens, this is one battle the industry can't win. All they can do is limit the fallout.
An NAIC conference call on the controversy yesterday drew over 100 participants. While the regulator group did not promise any definitive action (nothing unusual there), the NAIC appears primed to move forward, much to the chagrin of industry groups. (For full coverage of the conference call, click here.)
"The NAIC is a non-profit, non-governmental entity. As such, it should not collect proprietary market data for which no guarantee of confidentiality can be provided, said AIA President Marc Racicot. He added that this information is extremely sensitive, and if it were to be compromised, there would be needlessly harmful ramifications for both consumers and insurance companies.
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