A major property-casualty trade association has raised concerns about the National Association of Insurance Commissioners' role in creating new databases.
Marsha Harrison, regulatory affairs counsel for the National Association of Mutual Insurance Companies, said “the proliferation of NAIC databases undertaken without regard to cost, duplication or confidentiality is a serious issue for insurers.”
Ms. Harrison noted the NAIC has cooperated with the industry since the 1980s 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,” she said.
Among the concerns Ms. Harrison cites regarding this expanded NAIC role are a lack of transparency in the planning of database construction and pricing, and assertions of NAIC control and ownership of data obtained from the industry.
Ms. Harrison also questioned claims that NAIC databases have special legal status and are not subject to state or federal laws, as well as the expectation that the databases will be funded by the industry through NAIC revenue.
NAMIC is the latest insurance industry group to question NAIC data operations. Others have questioned the placing of a proposed fingerprint repository, now in the pilot stage, with the NAIC rather than the National Insurance Producer Registry.
Industry representatives have questioned the direction the new Online Fraud Reporting System has taken, saying it duplicates mechanisms already in place by the National Insurance Crime Bureau. They have also voiced dissatisfaction with the privacy protections involved
Ms. Harrison also used the example of the new Market Conduct Annual Statement similar to one for financial issues. A total of 23 states are now taking part in the project “which appears to be an added layer of regulation, cost and compliance burden for the companies but without any benefits, such as fewer regulatory requirements.”
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