The National Association of Independent Insurers has issued a statement that a regulation proposed by the State of Missouri’s Insurance Department requiring insurers to enter into contracts with all third party vendors “possibly exceeds the department’s authority and could jeopardize trade secrets and violate privacy laws and rules.”
NAII Counsel Ann Weber submitted a letter to the department urging it to scrap the proposed regulation. She asserted that the cost of implementing them would “far exceed” the regulation’s fiscal note of $500, and that the state’s consumers ultimately would pay that cost.
She also stated that “The proposed requirements could have significant legal ramifications for insurers including divulging trade secrets and information possibly protected under privacy rules and laws,” and indicated that the industry was also concerned by “the significant cost factor involved with the proposed requirements.”
The NAII bulletin gave several examples of the burdensome and costly effects the new regulations could produce, affecting the estimates companies require from contractors in adjusting property damages claims, estimates on jewelry losses, and on damages to automobiles. Weber called the new regulations impractical, suggesting that the requirements could be extended even to police and fire department reports.
The NAII bulletin noted that existing regulations are sufficient to handle any problems that arise. They “clearly state that an insurer must provide documentation so the department can ascertain its practices during a market conduct exam.” Weber asserted that the existing language is “clear, succinct and gives the department ample authority to gather the necessary documentation to analyze whether an insurer is acting appropriately in all dealings, whether a third-party vendor/provider is included or not. Any issue involving a third-party vendor or provider is addressed under the already existing rule.”
Topics Legislation Missouri
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