Royce requested the review in a letter delivered today to Michael McRaith, FIO director.

Royce contends NAIC practices are problematic from a legal perspective as well as a good governance perspective.

"If they were a federal regulatory agency, there would be checks on their budget and their operations," Royce explains. "Unfortunately, very few checks exist today on the NAIC." 

NAIC officials in Washington confirmed that they had received the letter, but said they would have no comment.

Royce is a senior member of the Capital Markets and Financial Institutions and Consumer Credit Subcommittees of the FSC.

He says in his letter, "Despite not having general Congressionally-authorized regulatory power," recent NAIC actions "would suggest it and its members believe it does, in fact, have" regulatory authority.

"And despite claims that most policy discussions are held in a public forum, meeting records suggest otherwise," Royce says.

"My 'ask' to Director McRaith in this letter is simple: take a look at NAIC's structure, the actions it is taking, and its budgetary process," Royce says in the letter.

"Does it have the necessary accountability?" Royce asks.

Royce says, "It is my hope that Director McRaith's pending report on insurance modernization will kick off a debate on the future of insurance regulation in the U.S; however, I don't believe we can have that discussion without first conducting an analysis of one of the key players in the existing system."

Elizabeth Festa contributed to this report