GRAPEVINE, TEXAS–The National Association of Insurance Commissioners has adopted a conflict of interest policy for consumer representatives whose expenses to attend its meetings are funded by the NAIC.

The proposal was unanimously passed by the executive committee and plenary at the NAIC's winter meeting here, and the possibility of taking further action on the issue is being left open, according to statements made during the discussion of the topic.

A policy statement on conflicts was developed by the Consumer Board of Trustees (CBOT), which includes NAIC-funded consumer representatives and regulators led by Wisconsin Commissioner Sean Dilweg.

The policy states that representatives who take compensation from a company or organization defined as “a regulated entity” may compromise effective funded consumer representation.

It goes on to say that if a consumer rep or an immediate family member receives compensation, then it must notify the CBOT and the NAIC staff person within seven days of the receipt of the compensation or agreement to receive compensation. Items that will be looked at include expense reimbursement, employment income, receipt of gifts and honoraria.

During the conversation, Connecticut Insurance Commissioner Tom Sullivan called the document “a good first step” and mentioned the possibility of expanding the statement beyond “regulated entities” given the fact that “every one of us lives in a transparent world.”

Although there is no formal charge to expand the conflict statement, the possibility of raising the issue at the next CBOT meeting was mentioned during the discussion.

Following the vote, Birny Birnbaum, an NAIC-funded consumer rep and part of the CBOT during the statement's development, said: “We'll be happy to talk about this when it comes up. I wish that the commissioners could devote the same time and effort in responding to recommendations made by consumer advocates as they do worrying about a handful of consumer advocates who volunteer their time to come to the NAIC.”

And, he noted, “I would like to see the same transparency in the capital and surplus relief working group.” The new group was formed without a public discussion in response to a request from the American Council of Life Insurers, Washington, to loosen capital requirements.

He asked whether groups such as the National Association of Mutual Insurance Companies, Indianapolis, are required by the NAIC to reveal what individual member companies contribute in dues.

NAMIC sent a letter on Nov. 24 applauding a consumer conflict statement and calling on it to be more comprehensive and go beyond disclosing associations with “regulated entities.”

Special Reports /

Conflict Policy Set For NAIC Consumer Reps

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