The National Association of Insurance Commissioners (NAIC) Fall National Meeting is drawing to a close Wednesday, and already the talk of the conference is centering on an angry motion put forward by Connecticut Insurance Commissioner Tom Leonardi Monday.
In an Executive Committee meeting, Leonardi called for a corporate-governance review of NAIC itself, to be conducted by an outside firm. The member commissioner slammed NAIC for supposedly poor decisions made by what he termed an “imperial presidency.”
NAIC’s Executive Committee rejected the motion, but not before Leonardi’s antics garnered plenty of discussion among other commissioners, who agreed that NAIC may well need an outside review. New York Superintendent Ben Lawsky seconded Leonardi’s motion, saying transparency is important for the association.
The outburst came after Leonardi penned a Dec. 11 letter to fellow commissioners, detailing issues with NAIC including last month’s decision by some members to turn down an invitation to meet with President Barack Obama on issues surrounding the Affordable Care Act rollout.
Washington state commissioner Mike Kreidler is quoted in the letter on the divide, saying, “This could be so bad that it might be the pivotal point we later recognize that doomed state-based regulation. Talk about a self-inflicted wound!”
Leonardi said that despite “external threats” like the recently released Federal Insurance Office report and the growing regulatory authority of the Federal Reserve, “the biggest challenge we face is the dysfunction in our own organization.”
He pointed to weekly meetings among NAIC leadership and the authority of the Executive Committee as prominent issues that “dictate and steer” the organization without reference to the opinions of other NAIC members.
“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.
