Is a group that is tasked with representing consumers before insurance regulators in conflict when the organization gets 5 percent of its budget from an insurance company?

This question was among those posed as work continued on a conflict of interest policy for consumer representatives to whom the National Association of Insurance Commissioners provides funds to attend its meetings.

The discussions are underway in preparation for the organization's fall meeting next week.

It was suggested during a discussion between insurance commissioners and NAIC-funded representatives that examples should be developed as guidelines in determining when compensation can and cannot be accepted.

Toward that end, Birny Birnbaum, a funded consumer rep and executive director with the Center for Economic Justice, Austin, Texas, offered some examples that could be considered for further discussion.

Among the examples he offered are compensation such as:

o Travel expense reimbursement or an honorarium to speak to a trade association of regulated entities, or to testify on behalf of such entities before a state legislative, administrative or other policy-making entity.

o A contribution for general support of a consumer organization from regulated entities, or for services provided to the regulated entity to ensure compliance with state and federal laws.

o A payment for withdrawing an objection to a class-action lawsuit settlement to improve the settlement for consumers.

o A grant to fund research by the individual or her organization.

Mr. Birnbaum asked questions about the possible guidelines, such as whether these examples are a conflict of interest, and whether they require disclosure or some other form of action.

Special Reports /

NAIC Works On Consumer Reps Conflict Policy

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