Consumer advocates speaking to state insurance regulators todayurged them to make transparency of data part of a controversialprogram to analyze insurers' market conduct.

Their comments came during a conference call to discuss theinitiative, which will be voted on in late September by members ofthe National Association of Insurance Commissioners.

The consumer advocates emphasized the importance of the projectwhich would establish a procedure for collecting and then storingmarket conduct data of insurers as well as a procedure fordetermining which data elements should be made public and keptconfidential.

The special teleconference was held in response to complaints tothe Kansas City, Mo.-based NAIC by consumer groups, who said thatthey were not receiving the same opportunity to be heard asindustry representatives.

NAIC commissioners were expected to vote on the project at July8 conference call. Asked about this, Montana Insurance CommissionerJohn Morrison said that the organization made a decision to cancelthe meeting following the resignation of Catherine Weatherford asNAIC executive vice president and CEO (see NU, July 7/14).

The matter will receive a 1-hour discussion during aCommissioners' gathering in Chicago in August and a vote takenduring the fall NAIC meeting in Washington at the end of September,according to Mr. Morrison.

Consumer representatives offered reasons why it was importantthat data be available to the public and the data project beadvanced, including:

o The availability of "tens of thousands" of data points offinancial information of companies but no such availability ofmarket conduct data.

o A need for a procedure for truly evaluating the merits ofmaking individual data elements public or keeping themconfidential.

o A lack of proof by industry to back up claims that tradesecrets would be violated or there would be an "avalanche oflawsuits" would indeed happen if data were made public.

o The need for the ability to create a system that would be bothefficient and effective, streamlining the market conduct processwhile targeting problems.

o The success of the Home Mortgage Disclosure Act which requirespublic access to mortgage data despite similar arguments made bythe mortgage industry.

o The ability for consumer representatives to be able to pointto tangible evidence when asked by consumers to provide informationon "reputable" insurers.

Washington Insurance Commissioner Bill Kreidler noted that hisstate as well as several other states have laws in place that treatmarket conduct data as confidential. In these states, laws wouldhave to be amended, he added.

Montana's Commissioner Morrison, who is also chair of the NAIC'sMarket Regulation and Consumer Affairs "D" Committee, theoriginator of the proposal, said that the NAIC is currently doinglegal homework on two points: whether state laws are broad enoughto preclude the sharing of data, which may be the case in fivestates and whether the NAIC could enter into agreements with thosestates to keep the data confidential and do it in a way that itwould remain confidential if the NAIC received a subpoena.

Oklahoma Insurance Commissioner Kim Holland noted how helpfulaggregated data would be to regulators and added that data inmarket conduct exams is often made public anyway. So, Ms. Hollandsaid, it would really be a matter of at what point the data wasmade public.

The current process is "cumbersome," noted NAIC President andKansas Insurance Commissioner Sandy Praeger. "The process reallyaddresses industry concerns about multiple exams in multiplestates."