Washington, D.C. – Current and former funded Consumer Representatives to the National Association of Insurance Commissioners (NAIC) have announced their opposition to a U. S. Senate Finance Committee proposal that would give the NAIC rule-making authority in drafting health insurance standards. The proposal is contained in the Senate panel’s America’s Health Future Act.
In a letter signed by 14 current and former Consumer Representatives and sent to the Senate Financing Committee, the group urges that rule-making authority be kept in the jurisdiction of government agencies that operate under standards requiring transparency, independence, and open meetings.
“Any institution given the authority to promulgate final regulations which have the force of law- especially those that will determine health insurance benefits for millions of Americans must be bound, at the very least, by all of the standards which federal government agencies are currently required to follow during the rule-making process,” said Kevin Lucia, a Professor at Georgetown University and NAIC funded Consumer Representative. Based upon its usual manner of conducting business, the NAIC fails to meet any of these standards.
“While we strongly support the valuable advisory role the NAIC has played this year in the health care deliberations, we cannot support expansion of that role to include rule-making authority,” said Betty Ahrens, Director of the Iowa Citizen Action Network.
In its letter, the group said that the NAIC does not operate independently of the insurance industry and, in fact, “a majority of the NAIC Presidents from 1998 through 2007 have gone to work for the industry they regulated, as have many other insurance commissioners with leadership roles in the NAIC. This revolving door gives the impression that leadership positions at the NAIC are stepping-stones to careers in the insurance industry.”
The group also questioned NAIC’s commitment to consumer concerns.
“Consumer advocates who have participated in the proceedings have long recognized an institutional bias among insurance regulators toward the interests of the insurance industry,” said Birny Birnbaum, Executive Director of the Center for Economic Justice. “The consumer representatives who participate in its proceedings are significantly outnumbered at NAIC meetings by many hundreds of representatives from the insurance industry and industry-related groups. We need rule-makers to be independent of the insurance industry, and the NAIC clearly does not meet this vital standard,” Birnbaum said.
The group said there must be complete transparency in the rule-making process, pointing out that in recent years, there has been an increase in the number of closed meetings, including exclusion of the NAIC’s own consumer advocates. And, when meetings are open to the public, there is often no opportunity for public input.
“Without transparency, Americans cannot be assured that new health insurance regulations truly represent the input of the public, and address the consumer’s concerns,” said Bob Hunter, Director of Insurance with Consumer Federation of America and a former Texas state insurance commissioner.
The following current and former NAIC Funded Consumer Representatives sent the letter to urge Congress to continue working with the NAIC as advisors, but to leave rule-making responsibilities with a government agency that is independent, transparent, and accountable to the public.
Current Funded NAIC Consumer Representatives
Betty Ahrens
Iowa Citizen Action Network
Amy Bach
United Policyholders
Birny Birnbaum
Center for Economic Justice
Brendan Bridgeland
Center for Insurance Research
Pam J. Bolton
Texas Watch
Karrol Kitt
Kevin Lucia
Assistant Research Professor Health Policy Institute
Georgetown University
Sally McCarty
Former Indiana Insurance Commissioner
Gregory Squires
Professor of Sociology and Public Policy and Public Administration George Washington University
Daniel Schwarcz
Associate Professor
University of Minnesota Law School
Former Funded NAIC Consumer Representatives
Constance Chamberlin
Housing Opportunities Made Equal of Virginia, Inc.
J. Robert Hunter
Director of Insurance
Consumer Federation of America
Kevin P. Lembo
Ware Wendell
Connecticut State Healthcare Advocate