AIA Pleased by Formation of New NAIC Working Group on Class Action

December 11, 2002

Arkansas Insurance Commissioner Mike Pickens, newly elected president of the National Association of Insurance Commissioners (NAIC), reported during a meeting of the Consumer Protection Working Group that the NAIC will create a new working group that will focus on the threat to state regulation arising out of litigation. Specifically at issue are class action lawsuits and other cases where the court in one state nullifies the insurance regulation of other states.

“We anticipate that the new working group will be looking at things such as a stronger focus on this threat to quality state regulation, greater participation in the courts, and model legislation proposed by other groups, David Snyder, AIA vice president and assistant general counsel, said.

“The greatest threat to balanced state regulation does not come from legislative chambers, but rather from courtrooms. To be effective, this group should focus on protecting the due process rights of the parties, protecting the regulation of one state from infringement by another, and assuring that regulation is done by regulators who are concerned with solvency and costs,” Snyder noted.

“It is important to recognize that this new group should be focusing on insurance regulatory issues and not tort reform. The threat posed by certain class action lawsuits to state regulation definitely warrants the attention of the NAIC, and AIA looks forward to working with the new group on this critical issue,” Snyder concluded.

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