Rough Notes November 2017 : Page 35

questions his judgment. When Bob Hunter lies down on that proverbial bed of nails and yelps about “industry pressure” at the NAIC, the sound of his displeasure no longer rings as true as it once did. Industry pressure is a core tenet of “Biblical Capitalism.” But we digress from the subject at hand. Bait and switch As the NAIC took its traveling drinking binge to Philadelphia, con-sumer advocates believed that the subgroup of a working group of the association’s Kafka-esque committee system would do something helpful. The study group would recommend an auto insurance “data call” to facili-tate a meaningful analysis of product pricing. The data—including company-level information—would come to the NAIC. This construction runs counter to decades of lobbying by insurance carriers. The carriers argue that com-petition rather than rate review is the best regulator of the sector—which ignores the McCarran-Ferguson Act’s call for state regulation. Some com-panies contend that providing com-pany-specific data will compel them to transmit “trade secrets” to competitors. Because the NAIC and its obscenely over-compensated senior staff are dependent on industry money, the rank-and-file insurance commissioner receives an appointment only after a review by insurers. Given the cumu-lative effect of a lot of alcohol, fine dining, and other recreational activity, the consumer advocates’ hopes were a long shot at best. In the long history of the NAIC, the only examples of the association taking steps in the public interest followed unrelenting political pressure from progressive Congressional committee chairs. Because no progressive com-mittee chairs are currently serving in Congress, consumer advocates should know that they are playing defense at the NAIC. As this year’s NAIC national meet-ing convened, it became apparent that consumer groups once again would receive the proverbial tour of the underside of a bus. The NAIC-based data call was not going to happen. Thanks to decades-long efforts by groups like The Fellowship Foundation, Bob Hunter had very few friends in the room when the Auto Insurance Study Group tossed aside a regulator-produced draft data collection plan for auto insurance on August 6 of this year. In place of the regulators’ work product, the NAIC study group applied the proverbial rubber stamp to a brand-spankin’ new proposal thrown NOVEMBER 2017 over the transom by lobbyists. The next day the CFA released a statement that blasted the NAIC. “After years of obstructing the efforts of the working group to collect data for a meaningful analysis of auto insurance affordability and pric-ing practices, the industry suddenly offered a gift of data as an alternative to the thorough research approach a group of state regulators had devel-oped,” said Hunter. Those nails must be causing Bob a lot of pain. n The author Kevin P. Hennosy is an insurance writer who specializes in the history and politics of insurance regulation. He began his insurance career in the regulatory compliance office of Nationwide Insurance Cos. and then served as public affairs manager for the National Association of Insurance Commissioners (NAIC). Since leaving the NAIC staff, he has written exten-sively on insurance regulation and testified before the NAIC as a consumer advocate. Reader Service Card No. 113 35

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