NU Online News Service, July 12, 4:08 p.m.EDT

The National Association of Insurance Commissioners todaydropped its support for exempting insurance agents' commissionsfrom the medical loss ratio provision of the healthcare reformlaw.

The NAIC acted during a plenary conference call after severalcommissioners, led by California insurance commissioner Dave Jones,voiced opposition.

The decision not to pursue a vote was made by Florida insurancecommissioner Kevin McCarty, head of a task force that, on June 30,approved a resolution voicing support for House legislation thatwould have exempted agents' commissions from the MLR (H.R.1206).

Interim regulations issued by the Department of Health and HumanServices to implement the federal healthcare reform law classifiedproducer compensation within overall administrative expenses thatare limited to 15 percent or 20 percent of premiums collected.Under H.R. 1206, producer compensation would be calculated outsideof that MLR.

Producer groups have testified that agent commissions havedropped 50 percent this year because of the HHS action implementingthe MLR.

Rep. Mike Rogers, R-Mich., primary sponsor of the legislation,said recently at a House hearing that health insurance agents andbrokers will continue to be in a "desperate situation" unlessCongress acts to change the MLR provision in the HHSregulation.

After Jones asked McCarty pointblank whether the task force voterepresented NAIC policy, McCarty, the incoming NAIC president said,"No." McCarty then dropped his effort to pursue a vote by the fullplenary.