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NAIC Told to Show More Transparency

Insurers and even some regulators are calling for greater transparency on the part of the National Association of Insurance Commissioners (NAIC). Of particular concern is...
December 11, 2007

Insurers and even some regulators are calling for greater transparency on the part of the National Association of Insurance Commissioners (NAIC). Of particular concern is the way the NAIC develops testimony for Congressional hearings.

Their comments followed another NAIC liaison meeting, this one held last week during the NAIC winter meeting with consumer representatives, who recommended that commissioners pursue a policy of open meetings to ensure better participation when policy issues are being developed.

Deidre Manna, a representative with the Property Casualty Insurers Association of America (PCI), noted that the NAIC testifies before Congress about 30 times a year. She asked if there was a formal process for approving the positions it takes during testimony, adding that if there isn't there should be.

Marsha Harrison, representing the National Association of Mutual Insurance Companies (NAMIC), said there are three types of NAIC activity that concern industry members:

  1. When NAIC Congressional testimony is in conflict with what working groups and committees at the NAIC are doing;
  2. When a single commissioner speaks his or her individual views, but NAIC publicity makes it appear as if the testimony represents the organization;
  3. When a news release praises an act in Congress when the NAIC has not adopted a position.
     
    Michael McRaith, Illinois insurance director and chair of the NAIC's industry liaison committee, said that e-mails are exchanged and there is a discussion among members so that commissioners have a chance to look at testimony. Then it is used, he said. 

Ohio Insurance Director Mary Jo Hudson disagreed, saying on a number of occasions an NAIC position has not reflected her state's stance. She said she gets the impression that the entire NAIC does not have equal input when public positions are considered. "It was a done deal by the time it was circulated," she said.

Former Indiana insurance commissioner Sally McCarty joined the consumer representatives in calling for the NAIC to adopt a new policy on open meetings. Several participants said that policy discussions don't warrant the penchant for secrecy being exhibited by the NAIC.