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NAIC to Review Personal Lines Contract Transparency

A working group of the National Association of Insurance Commissioners (NAIC) will review an assertion that a consumer representative made, saying that insurers are not...
October 27, 2010

A working group of the National Association of Insurance Commissioners (NAIC) will review an assertion that a consumer representative made, saying that insurers are not transparent enough for policyholders to properly evaluate the difference in underwriting between carriers. The NAIC's Property and Casualty Insurance Committee voted Oct. 21 to appoint a Transparency and Readability Working Group to look into ways to improve consumers' ability to compare differences in personal lines policy coverage.

This decision was made after the NAIC's consumer representative, Daniel Schwarcz, said that homeowners' policies do not all offer the same extent of coverage, and that coverage quality can differ from policy to policy. Schwarcz agreed with an argument made by Connecticut Insurance Commissioner Thomas R. Sullivan that many consumers do not fully read their policies. Earlier this month Insurance Information Institute President Robert P. Hartwig countered Schwarcz's findings, saying that insures offer different policies to consumers to distinguish themselves in a very competitive marketplace. He also said agents and brokers have to be knowledgeable about the policies they are selling in order to add value to the products they sell.

Click here to read NAIC to Review P/L Contract Transparency (National Underwriter 10/21/10)