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NAMIC Urges Deliberative, Open Approach by NCOIL on Broker Disclosure Model

INDIANAPOLIS (Dec. 1, 2004)--The National Association of Mutual Insurance Companies (NAMIC) issued the following statement concerning the National Conference of Insurance Legislators (NCOIL) Proposed Insurance Broker Fiduciary Duty and Conflict of Interest Model Law:

[Please attribute to Roger H. Schmelzer, senior vice president-state and regulatory affairs]

"NAMIC encourages NCOIL to take a deliberative approach to this issue. Real leadership is needed and NCOIL legislators are well suited to provide it if a reasoned solution is developed. While we agree that the NCOIL draft attempts to narrow the restrictions to just insurance brokers, we are concerned that the definition of broker is too broad. Additionally, creating a fiduciary duty creates real marketplace issues that need to be vetted thoroughly.

"While NAMIC supports disclosure where appropriate it ought not create barriers to everyday transactions in main street America. Policymakers need to realize that legislation that is too broad and acted upon too quickly will have a negative impact on most insurance purchases.

"Certainly, the recent bid-rigging allegations have identified wrongdoing in the marketplace. Those responsible should be held accountable and some new regulation may be necessary in the area of disclosure for brokers. The challenge for legislators and regulators is not to make policy by headline but rather take a thoughtful approach to developing a solution that protects consumers, but still allows for the normal course of insurance transactions.

"We have specific concerns related to the NCOIL draft but are confident that these can be worked through. NAMIC also is encouraged that NCOIL has developed this model and had discussions in an open arena that allows for all to participate."

NCOIL is an organization of state legislators interested in insurance legislation and regulation. NCOIL member states represent more than 90 percent of insurance premium written in the United States. Many legislators active in NCOIL either chair or are members of the committees responsible for insurance regulation in their respective state houses across the country.

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For further information contact:
Robert Detlefsen at rdetlefsen@namic.org
or (317) 875-5250