NAIC Data Collection Stir Continues

SAN FRANCISCO–A controversial proposal to collect insurance company data and store it nationally with the National Association of Insurance Commissioners continued to draw criticism even as regulators insisted it would be better for both consumers and insurers.

Insurers for all the major property-casualty and life trade organizations said the proposal needed more consideration. Namely, they said the confidentiality of data and its possible exposure to both class-action attorneys and other insurers who would use data for competitive reasons warranted more assurance that any data submitted would be protected.

Among the organizations that addressed the issue were the National Association of Mutual Insurance Companies in Indianapolis; the Property Casualty Insurers Association of America, Des Plaines, Ill.; The American Council of Life Insurers and the American Insurance Association, both in Washington.

While saying they support the concept of greater uniformity and ease of filing, they questioned giving the NAIC the power to collect data and asked what would be done with it.

In response to inquiries whether the data would be aggregated and then sold like financial data currently is, Sandy Praeger, Kansas insurance commissioner and NAIC president, said that it would cost more to prepare the data for sale than the revenue it would generate (Highline Data, an affiliate of National Underwriter, is a distributor of such data).

Consumer advocates, including Birny Birnbaum, an NAIC-funded consumer and executive director of the Center for Economic Justice in Austin, Texas, said that such data would provide consumers with a clearer market conduct picture and would be useful to regulators in ensuring proper market conduct behavior.

Montana Insurance Commissioner John Morrison, chair of the Market Regulation and Consumer Affairs “D” Committee, said the proposal would not only create more uniformity of regulation but would also make it simpler for companies to file data in one place than state by state. He noted that insurers had asked for a simpler way to file the data.

One regulator told National Underwriter that while the project might be a worthy one, the blanks was not the place for such data because it would make it too cumbersome.

More discussion is planned, with a vote possible by the end of June, according to Ms. Praeger.