The National Association of Insurance Commissioners (NAIC) announced this week it has decided to hire an outside consultant to audit its own governance, organizational structure and committee processes. The decision came unanimously from the national organization’s Governance Review Task Force.
“As in past reviews of NAIC governance, we hope the consultant can assist us in facilitating a thorough evaluation and identifying best practices for us to consider,” said NAIC President Adam Hamm.
The group, which includes state insurance regulators, told Insurance Business America NAIC regularly reviews its governance practices through the use of outside consultants.
The decision comes six months after NAIC’s National Meeting in December, in which Connecticut Insurance Commissioner Tom Leonardi made headlines for ripping into the organization and labeling its leadership an “imperial presidency.”
Leonardi, a member of the Governance Review Task Force, called for a corporate governance review by an outside firm, though the Executive Committee initially rejected the motion.
Leonardi also penned a Dec. 11 letter to fellow commissioners criticizing the group for failing to unite in its approach to the Affordable Care Act. Some members had recently turned down an invitation to meet with President Barack Obama on the issue, sparking something of a schism within the group.
Leonardi argued that despite “external threats” such as the uncertain future of the Federal Insurance Office, “the biggest challenge we face is the dysfunction in our own organization.”
“If we cannot fix these governance issues, then others, including industry and the federal government, would be right to question whether we are up to the task of regulating the largest insurance market in the world,” Leonardi concluded in his letter.
NAIC hopes to issue an RFP later in the week to “facilitate selection of a consultant,” and is planning on starting work in September.
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