As an advocate for a reformed system of state insurance regulation, the National Association of Mutual Insurance Companies (NAMIC) recognizes the key role played by the National Association of Insurance Commissioners (NAIC). Due to the significance of that role, NAMIC believes it is imperative for the NAIC to conduct its business openly, and has therefore repeatedly urged the regulators’ organization to operate in a more transparent fashion.
So we commend Louisiana Insurance Commissioner Jim Donelon, Missouri Commissioner John Huff, and others for their leadership in proposing changes to the NAIC’s Policy Statement on Open Meetings that were introduced during the group’s national meeting last fall. We share with the commissioners a strong belief that by adopting a meaningful and effective open meetings policy, the NAIC will engender much-needed confidence among regulated businesses and other policymakers.
While NAMIC commends the NAIC for taking up this matter, we believe the policy statement could be improved further and have submitted detailed recommendations to the NAIC for consideration. On the positive side, the elimination of the blanket grant of discretion to chairpersons of committees, subcommittees, task forces and working groups to close a meeting or hold a closed meeting represents a significant improvement to the policy statement.
But the caveat that the policy does not apply to “roundtable discussions, zone meetings, commissioners’ conferences and other like meetings of the members” undermines the intent of openness and transparency. The open-ended list of excluded meetings contains myriad sessions in which NAIC policy is discussed and developed, and there is no reason why the policy should not apply to all of them absent a credible justification for an exception.
We also continue to have strong concerns over the potential exemption of “consultations with NAIC staff members … related to NAIC technical guidance … Annual and Quarterly Statement Blanks and Instruction, the Accounting Practices and Procedures Manual, and similar materials.” While such an exemption to the policy may at first glance seem to be an improvement for not applying to any situation involving consultation with NAIC staff (which could include any and all NAIC activities), we believe that the additional language refers to instances in which open sessions should certainly be required. Because certain NAIC actions affect the substance of state law directly, and the bulk of those substantive changes are found in the annual statement and the various manuals, we believe that discussions involving technical guidance would benefit from industry involvement.
Finally, for the policy to be as effective as it needs to be, it should be explicit in how the NAIC would deal with noncompliance of any of its provisions. Although the policy statement as revised provides narrower discretion to hold closed meetings, we believe it is still advisable to develop a means of redress for potential abuse of the discretion it provides.
NAMIC appreciates that the proposed changes reflect an earnest effort on the part of the NAIC to make the policy statement on open meetings more effective in the pursuit of much-needed transparency. It represents a meaningful first step in the right direction, and we urge regulators to go further to engender a level of stakeholder confidence that befits the NAIC’s role in the regulation of insurance.