Consumer advocates speaking to state insurance regulators today urged them to make transparency of data part of a controversial program to analyze insurers' market conduct.

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

The consumer advocates emphasized the importance of the project which would establish a procedure for collecting and then storing market conduct data of insurers as well as a procedure for determining which data elements should be made public and kept confidential.

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

NAIC commissioners were expected to vote on the project at July 8 conference call. Asked about this, Montana Insurance Commissioner John Morrison said that the organization made a decision to cancel the meeting following the resignation of Catherine Weatherford as NAIC executive vice president and CEO (see NU, July 7/14).

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

Consumer representatives offered reasons why it was important that data be available to the public and the data project be advanced, including:

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

o A need for a procedure for truly evaluating the merits of making individual data elements public or keeping them confidential.

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

o The need for the ability to create a system that would be both efficient and effective, streamlining the market conduct process while targeting problems.

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

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

Washington Insurance Commissioner Bill Kreidler noted that his state as well as several other states have laws in place that treat market conduct data as confidential. In these states, laws would have to be amended, he added.

Montana's Commissioner Morrison, who is also chair of the NAIC's Market Regulation and Consumer Affairs "D" Committee, the originator of the proposal, said that the NAIC is currently doing legal homework on two points: whether state laws are broad enough to preclude the sharing of data, which may be the case in five states and whether the NAIC could enter into agreements with those states to keep the data confidential and do it in a way that it would remain confidential if the NAIC received a subpoena.

Oklahoma Insurance Commissioner Kim Holland noted how helpful aggregated data would be to regulators and added that data in market conduct exams is often made public anyway. So, Ms. Holland said, it would really be a matter of at what point the data was made public.

The current process is "cumbersome," noted NAIC President and Kansas Insurance Commissioner Sandy Praeger. "The process really addresses industry concerns about multiple exams in multiple states."

Special Reports /

Consumer Groups Press NAIC To Make Conduct Info Public

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