The outgoing President of the National Association of Insurance Commissioners (NAIC) has criticized a new report on the effectiveness of insurance regulation by the states that was produced by the National Conference of Insurance Legislators (NCOIL). Walter Bell said the NCOIL study should have had input from the NAIC.

Bell said that the 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,” did not have input from the regulatory community and some of the information was “undocumented.” In remarks during an NCOIL liaison meeting during the NAIC winter meeting, 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.

In response, NCOIL President Brian Kennedy said, “We, as state legislators are obligated to properly oversee our insurance regulators and—in turn—the NAIC, as state legislatures have both directly and indirectly delegated authority to these entities to enforce our will. We at NCOIL take this study and its recommendations very seriously, since we, as well as regulators, will be held accountable. NCOIL will do its best to ensure that the state system continues to thrive, so that we can take credit for its success, rather than share the blame for its failure.”

The NCOIL study focused on enhancing the authority of commissioners, 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.

December 11, 2007