Last month, 14 consumer groups sent a letter to the National Association of Insurance Commissioners (NAIC) complaining about the latest former NAIC president to quit his government post to join the industry he regulated, Alabama’s Walter Bell. Now, NAIC regulators and their funded public advocates are discussing a conflict of interest policy – for consumer representatives.

The proposal being discussed would require consumer representatives 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 policy for advocates being deliberated would apply to those whose attendance at NAIC sessions is partially funded by the NAIC. 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.

The consumer groups have proposed closing the “revolving door” between the NAIC and industry by imposing a two-year ban on lobbying by former regulators. Their letter cited previous NAIC presidents who have gone to industry positions including Alessandro Iuppa, who left to take a job with Zurich, and Ernie Csiszar, who resigned midway through his term as NAIC president to take a job with the Property Casualty Insurers Association of America (PCI).

NAIC Eyes Conflict Policy For Consumer Reps (National Underwriter 9/4/08)

Consumers Urge NAIC Conflict Policy (National Underwriter 8/21/08)

September 10, 2008