Amid complaints about conflicts raised by the "revolving door" between insurance department heads and the carriers they supervise, regulators and funded public advocates are discussing a conflict of interest policy for consumer representatives.
Last month, 14 consumer groups sent a letter to the National Association of Insurance Commissioners complaining about the latest former NAIC president to quit his government post to join the industry he regulated, Alabama's Walter Bell.
However, during a recent meeting of the Consumer Board of Trustees–a committee established by the Kansas City, Mo.-based NAIC–the focus of discussion was determining how to create broad guidelines that would be reviewed by the board without creating a limited list of "dos" and "don'ts."
The issue is expected to receive additional discussion during the fall NAIC meeting later this month in Washington.
There was general agreement among Wisconsin Insurance Commissioner Sean Dilweg, who chaired the meeting, and funded consumer representatives on hand that an honorarium to speak at a conference of a trade group could be acceptable, but a fee to testify for the insurance industry on a specific industry position would not be appropriate.
An example raised during the discussion contrasted the difference between making a speech on behalf of the hemophilia association and receiving a token honorarium, and receiving a $50,000 fee to take an industry position.
The board seemed in agreement with a comment from Constance Chamberlin, a funded representative who is president and chief executive officer of Housing Opportunities Made Equal of Virginia in Richmond, that there was no conceivable way to list all possible conflicts of interest.
However, Birny Birnbaum, executive director of the Center for Economic Justice in Austin, Texas, said during the discussion that there should at least be some examples available that could serve as guidelines for the board. The reason, he explained, was that it would create precedent and continuity in the event of changes to the board's makeup.
The proposal being discussed would require consumer reps to notify the board within seven days of compensation or an agreement to receive compensation, so that it could be determined whether a conflict exists. The board would keep all financial information that was submitted confidential.
Conflict of interest policies have been an issue at the NAIC during the last year. In March, the NAIC executive committee and plenary adopted a conflict of interest policy for regulators.
(Jim Connolly is a senior editor with NU's Life & Health edition.)
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