NAIC Head Faults NCOIL Study Of Regulation

HOUSTON–The head of the National Association of Insurance Commissioners said a new report on the effectiveness of insurance regulation by states was based on unattributed information and should have had input from his group.

Outgoing NAIC President Walter Bell, who is the Alabama insurance commissioner, made his comments at the NAIC winter meeting here.

Mr. Bell reacted to a newly-released report prepared for the National Conference of Insurance by the Insurance Legislators Foundation titled, “A Study on State Authority: Making A Case for Proper Insurance Oversight.”

He said it did not have input from the regulatory community and some of the information was “undocumented” using attribution, such as “some say.”

Mr. Bell's remarks came during a liaison meeting with NCOIL members. The NCOIL study is the product of over a year of work by ILF researchers.

When legislators start to discuss the study in earnest next year, Mr. Bell said that he hopes that commissioners will be included in the NCOIL discussion so that “we can discuss what the case is today and not the perception of the authors.”

Mr. Bell said state regulators and state legislators are “both in this together,” with an effort to preserve state authority to oversee insurance regulation and that “innuendos can be very misleading.” Generally, a study can be biased by whoever is funding it, he noted.

During the discussion, Rhode Island State Rep. Brian Kennedy, D-Hopkinton, reviewed basic points made in the study including enhancing the authority of commissioners, and legislative oversight over regulators and regulatory activity including the NAIC, strengthening state regulation of insurance through the Interstate Insurance Product Regulation Commission, and reallocating state premium dollars to NCOIL from the NAIC.

Mr. Bell did not address these specific points during the discussion.

Later Mr. Kennedy said that NCOIL meetings are open and commissioners will have “ample opportunity in the future to speak out on the issue.” He questioned the criticism of the study authors for not contacting insurance commissioners, noting that it was being done on behalf of the ILF, not the NAIC.

And, he continued, an early version of the report was put on the NCOIL Web site after NCOIL's July summer meeting. The only new thing to be added in mid-November was the recommendations. There was nothing to prevent commissioners at the NAIC from contacting NCOIL with questions, concerns or suggestions when the study was first posted, Mr. Kennedy said.

Sue Nolan, NCOIL executive director, said that if regulators present NCOIL with any issues that they feel are undocumented, it will approach the authors for documentation. She also mentioned that there are many pages of footnotes in the study.