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 regulator group.
The proposal was unanimously passed by the NAIC's Executive Committee and Plenary at its quarterly meeting in Washington earlier this month–and the possibility of taking further action on the issue is being left open, according to statements made during the discussion.
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 NAIC's discussion of the issue, 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.
Following the vote, Birny Birnbaum–executive director of the Center for Economic Justice in Austin, Texas, as well as an NAIC-funded consumer representative–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.”
The National Association of Mutual Insurance Companies sent a letter on Nov. 24 applauding a consumer conflict statement, but called on the NAIC to make it more comprehensive by going beyond disclosing associations with “regulated entities” to include any organization with an interest in insurance regulation.
Mr. Birnbaum–who was part of the CBOT during the conflict statement's development–asked whether industry groups such as NAMIC are required by the NAIC to reveal what individual member companies contribute in dues.
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