NAIC Meeting To Tackle Scandal Remedies

The regulations will come as proposed amendments to the NAIC Producer Licensing Model Act.

Also included will be regulations affecting compensation paid by insurers to producers.

The measures were developed in response to investigations by various regulators that have surfaced since a civil suit was initiated by N.Y. Attorney General Eliot Spitzer in October alleging bid-rigging and anti-trust violations by Marsh Inc. brokerage in collaboration with major insurers.

In addition to New York, insurance regulators and attorneys general in at least 10 other states have been investigating various segments of the marketplace for questionable dealings including the life-health and agents sectors.

While the industry supports disclosure, there has been concern expressed by industry representatives that new notice requirements will add to the regulatory burden without adding any particular benefit.

Neil Alldredge, state relations director for the National Association of Mutual Insurance Companies, said with all the controversy about the fees lately, there are very few risk managers unaware of them.

"I think this is one time when the market is way ahead of the regulators," he said.

Also on Saturday, the Property and Casualty Reinsurance Study Group will consider whether additional regulations for "finite risk" reinsurance contracts are necessary.

These contracts have come under increased scrutiny in investigations by the Securities and Exchange Commission and Mr. Spitzer. Concerns have been voiced by industry members that these products have not been used to transfer risk but to distort companies' financial reports.

"We will follow this closely to make sure that legitimate reinsurance transactions, properly disclosed, will not be affected," said Steve Broadie, financial regulation manager for the Property Casualty Insurers Association of America.