Diane Koken, president of the National Association of Insurance Commissioners (NAIC) and Pennsylvania Insurance Commissioner, commented on actions by the NAIC efforts to prevent abuse. “State insurance regulators are actively pursuing all of the facts, assessing the adequacy of current laws or regulations, and will determine appropriate collaborative action involving all states in a very short period of time,” said Koken. “Brokers and insurance companies that have been abusing the system for personal gain will be identified and appropriate actions will be taken to see that all consumers’ concerns are addressed. We intend to coordinate directly with law enforcement officials in identifying and terminating this activity, as well as developing new regulations as needed to better monitor all sales activities.”

“In the interim, we encourage risk managers to assess whether they have been subject to these types of practices and, if so, to contact their respective state insurance department,” she added.

Massachusetts’ attorney general and the state’s top insurance regulator are separately investigating fee arrangements between insurers and brokers. Attorney General Thomas Reilly's office declined to say which companies or brokers are being investigated. Separately, Massachusetts' Division of Insurance has opened a market conduct examination of 10 carriers. In Georgia, Insurance Commissioner John Oxendine said his office will launch a market conduct exam of Marsh, Inc. Investigations are underway as well in California, Connecticut, Minnesota, Florida and Illinois.

NAIC Moves Forward to Prevent Industry Abuse (NAIC press release 10/20/04)

October 26, 2004