The National Association of Insurance Commissioners (NAIC) should transition from an association of state insurance commissioners to an organization that has the power and authority to represent states, a former NAIC exec writes in LifeHealthPro.
With standing and acceptance linked to an organization's authority, a stronger NAIC is key to overcoming insurance industry challenges, writes Jim Schacht, CEO of a Chicago-based insurance consultancy, who has a long history with the group. Moreover, all states should require their insurance commissioner to actively participate in the NAIC, he says.
The call to strengthen the NAIC's position in state regulation comes as its resources and functions significantly change--it now employs more than 400 people, expanded to an international focus and considers itself a standard-setting organization, according to the opinion piece.
To create a stronger NAIC, its functions should be set by state law to ensure transparency and accountability. "It can no longer be left to chance that the NAIC will always allow due process and provide transparency when it proposes enhancements or new requirements," Schacht says.
Among its efforts to become more than a trade association, the NAIC outlined steps states can take to mitigate premium increases, which are largely expected to continue rising as various reform provisions are implemented. The organization recommended states tighten their regulation of premiums by imposing a limit on rate changes, FierceHealthPayer previously reported.
The NAIC will need more power and authority as insurers like Aetna and Blue Shield of California continue to defy state regulators and proceed with double-digit rate hikes. What's more, health insurers in California are spending millions of dollars to defeat a state ballot initiative that would require them to get approval for rate hikes.
- read the LifeHealthPro article