An era truly came to an end during the winter meeting of the National Association of Insurance Commissioners, Kansas City, Mo. this past week. During the consumer liaison meeting, NAIC funded representative Birny Birnbaum announced that he would no longer be attending NAIC meetings after a dozen years of weighing in on everything from market conduct analysis (right from the start) to credit scoring (a project that he says has gotten some cursory review but no meaningful change from regulators.) He will continue his work with the Center for Economic Justice in Austin, Texas and will continue to weigh in on issues as they come up.
I can tell you that after attending the NAIC for many years, when Birny got up to speak, you came to attention and you poised your pen to take notes. Many of my journalist colleagues did the same. As did industry reps sitting in on meetings and hearings. As one put it, “he was a tough adversary.”
Joel Ario, Pennsylvania insurance commissioner, noted during consumer liaison, how Birnbaum had spurred on everyone by raising issues that were often not popular and how he had made the NAIC better because of it.
During the meeting, I had a chance to catch up with Birnbaum and ask him about his time spent as a funded consumer rep.
Birnbaum was very definite in his “sense that all regulators here believe that one of their jobs is to protect consumers, although there are different views on how best to do that. There is not a lack of will.” However, he restated what he had said earlier in consumer liaison that there is “an institutional bias in the regulatory structure.”
The reason, he continued, is that the industry has enormous resources that are generated by policyholder supplied funds that are used to present industry viewpoints.
And, he said he believes that for many commissioners who are looking for the next step, the fact that industry jobs may be the main alternative many have for the next career move, adds to that institutional bias.
Birnbaum reiterated three suggestions he offered in parting remarks:
--use a Texas model that would create a government agency funded rep by charging 10-15 cents per policy;
--Create a Consumer Insurance Board; or
--Include a flyer with every policy mailing which would require insurers to ask consumers if it was acceptable that a portion of premium was used to lobby for industry positions.
Birnbaum also said that the NAIC would benefit from restructuring its consumer program and to separate consumer reps that actually work with consumer organizations from academics. Both are valuable to the process, he noted. However, they bring different things to the table, according to Birnbaum.
Another parting recommendation Birnbaum offered was to both increase the current budgeted $120,000 for consumer reps and to increase flexibility so that, depending on the issue, some or all of the reps could attend each meeting. Any money saved could be used for different consumer rep initiatives, Birnbaum added.
While Birnbaum says that insurance commissioners have not given enough analysis and attention to issues of unfair discrimination such as redlining, he did praise them for taking a leadership role on issues including climate change.
He urged the NAIC to be less “reactive” to headlines and more proactive to addressing real consumer concerns. Birnbaum added, it has been “reactive in the last few years to how it can protect its turf.” But he said that he still believes they can take the lead in protecting consumers.