NAMIC Opposed to NAIC as Industry Database Czar

The National Association of Mutual Insurance Companies (NAMIC) questions the trend by the National Association of Insurance Commissioner (NAIC) to create new insurance industry databases.

“The proliferation of NAIC databases undertaken without regard to cost, duplication, or confidentiality is a serious issue for insurers,” wrote NAMIC Regulatory Affairs Counsel Marsha Harrison in NAMIC’s just released Issue Brief, “NAIC Databases Raise Concerns for Insurers.”

The NAIC has cooperated with the industry since the 1980’s in the development and maintenance of insurer financial information in the Financial Data Repository and, later, producer licensing information in the National Insurance Producer Registry. However, the NAIC’s position now is to take a more authoritative role over both current and newly developed projects, according to Harrison.

The Issue Brief highlights significant concerns about proposals for new centralized databases to be housed at the NAIC:

* A lack of transparency in the planning of database construction, funding, and pricing;
* Assertions of NAIC control and ownership of data obtained from the industry;
* Proposals for databases that duplicate existing private-sector databases;
* Representations that the NAIC databases have special legal status and are not subject to state or federal laws; and
* Expectations that the databases will be funded by the industry through NAIC revenues.

The NAIC maintains that it will create greater efficiencies and avoid data duplication among states. NAMIC argues that the NAIC’s proposed involvement will have the opposite effect: there will be increased cost, fewer efficiencies, legal compliance issues, added regulations, and little if any benefit to insurers. The Issue Brief looks at four specific database projects currently underway:

* Fingerprint Repository
* Antifraud Database
* Market Conduct Annual Statement
* Uninsured Motorist Identification Database

NAMIC said it will continue to work with the industry to scrutinize and question any current or new proposals involving database issues and will advocate against the creation of additional databases.