Posted On: January 20, 2005, 1:36 pm CST

Posted By: Donald Pachner

Mr. Koziol's criticism of the NAIC Model Agent Disclosure proposal clearly articulates the insurance carriers' point of view without showing an appreciation for the needs demonstrated by recent events in the industry.

The property & casualty insurers clearly benefit by the muddying of the waters where brokers who are actually acting as agents of the P&C carrier carry the implied fudiciary capacity on behalf of the policy holders.

P&C carriers have historically been able to take advantage of their agency relationship with the broker to gain leverage in market share while at the same time benefitting from this implied fiduciary capacity of the broker, all at the expense of the consumer of insurance.

Insurance in its purest form is reflected in forms such as the reciprocal and a social purpose is inherent in the concept of insurance.

Demutualization along with new pressures from the financial markets have driven P&C insurers to emphasize short term profit over the long-term underwriting philsophy that pervaded the industry pre-1980s.

The NAIC disclosure model provides a socially beneficial counter to the pull of the financial markets and the lack of clarity in broker representation, in addition to the disclosure patently called for by long-term problems brought to light recently by the Spitzer probes.