National Underwriter
July 17, 2003

Consumer Group Says NCOIL Has Industry Bias

By Daniel Hays

NU Online News Service, July 17, 4:41 p.m. EDT—A national consumer group said the leadership of a state legislators group that develops model insurance laws is undermining consumer protections, because 40 percent of the legislators have business ties to the insurance industry.

The Consumer Federation of America's criticism of the National Conference of Insurance Legislators was rejected by that group, which said it makes it a point to include consumer viewpoints in its activities, and that members' professional experience helps them consider legislation.

CFA said 40 percent of NCOIL's leadership has worked for or with the insurance industry and most of these NCOIL members have current business ties to the industry.

Susan Nolan deputy director of Albany, N.Y.-based NCOIL, said that she has not gone over all the members backgrounds, but she believed some had been mischaracterized by CFA. She noted that NCOIL's president, State Rep. Kathleen Keenan, D-St. Albans, Vt., is an emergency room nurse and the group's vice president is an attorney with a zoning law practice.

The CFA, in its report, said NCOIL has taken a series of recent positions on high-profile insurance issues that are "favorable, if not identical, to insurance interests and have frequently undermined consumer protections."

It mentioned a model bill on the use of credit scoring, a practice which it said involved frequent inaccuracies.

CFA also complained of a consumer credit insurance proposal it said would be costly to customers. The group cited a self-evaluation act that it said would give insurers secrecy for anything they claim as self-audit.

According to CFA, of 57 legislators, 23 had affiliations or did business with insurance interests and identified themselves with job titles such as insurance agents, claims representatives, agency owners or underwriters.

While there are 51 jurisdictions in the United States, only legislators from 34 are NCOIL members, said CFA.

Rep. Keenan, in a statement, said that NCOIL legislators are "on the front lines of protecting consumers' interests" and their "professional experience contributes to the development of sound public policy."

She noted that Robert Hunter, CFA's director of insurance, had addressed an NCOIL meeting on auto insurance two years ago and that Birny Birnbaum of the Center for Economic Justice had been part of recent NCOIL credit scoring discussions.

She said Mr. Hunter and other CFA representatives were invited to participate in last week's NCOIL meeting in Williamsburg , Va., but had declined.

"NCOIL brings together a confluence of ideas and practical know-how that can make state regulation work better today and even better tomorrow," stated Ms. Keenan.

CFA, however, believes that, "Too often, NCOIL's advocacy is virtually indistinguishable from [that] of insurance interests. Perhaps because so many of their members are affiliated with the insurance industry, NCOIL consistently promotes industry self-regulation and weak oversight of insurance abuses. CFA is thus issuing a consumer alert to federal and state lawmakers that they cannot count on NCOIL as an unbiased source of information on pressing insurance issues."