NU Online News Service, May 9, 1:17 p.m. EDT–It is unlikely that proposed strict fee disclosure regulations will eventually be imposed on insurance agents, according to a former head of a national regulators group.
That assessment came from Mike Pickens, one-time president of the National Association of Insurance Commissioners, who appeared on a conference panel with three other NAIC ex-presidents.
Mr. Pickens made his comments in response to an audience question during a session at last week's Orlando, Fla. meeting of the National Council on Compensation Insurance.
The former Arkansas insurance commissioner said the tough language requiring more agent disclosure of fees they accept from insurers, which is part of a proposed NAIC model law, was an initial response and probably would not be the group's final action.
He said the model, which is due to come up at the NAIC's June meeting, was a "knee-jerk" response to revelations about fee conflicts involving commercial brokers and suggested it may not be the NAIC's final decision on the subject.
Mr. Pickens, now with a Little Rock, Ark. law firm that does insurance regulatory work, said, "models don't matter until they are passed in state legislatures" and he noted that only Pennsylvania and Connecticut have put forward legislation to increase agents' disclosures.
Former NAIC President Terri Vaughan, who was an Iowa insurance commissioner before leaving for Drake University as an insurance professor, said that a number of insurance commissioners are currently in agreement that it is not necessary to take action with legislation dealing with agent commissions.
Members of the ex-NAIC presidents panel, which also included ex-North Dakota regulator Glen Pomeroy and George Nichols III, a former Kentucky commissioner, also commented on the insurance industry investigation activities of New York Attorney General Eliot Spitzer. Mr. Spitzer uncovered evidence of commercial brokerage bid rigging, insurers payoffs and accounting misstatements for various transactions.
Although they generally spoke in praise of his efforts, Mr. Pickens complained that attorney generals now "want to criminalize behavior that was fairly well set in the industry."
Ms. Vaughan said Mr. Spitzer had made himself "almost a de facto national regulator."
Mr. Nichols said that Mr. Spitzer had "changed the dynamics" of attorney generals' activity across the country"
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