NCOIL to Consider Resolution Opposing Labor Department Fiduciary Rule at Annual Meeting
November 8, 2016 by Thomas Harman
LAS VEGAS – The National Conference of Insurance Legislators will discuss a resolution opposing the Department of Labor’s fiduciary rule at its annual meeting in Las Vegas, Nov. 17-20.
Also on tap are discussions about big data and new model legislation to save insurers claims costs by preventing abuse by towing services.
The NCOIL Executive Committee is expected on Nov. 20 to consider approving the resolution by Arkansas state Sen. Jason Rapert, a member of NCOIL’s Financial Services and Investment Products Committee that approved it during NCOIL’s Summer Meeting in Portland, Oregon. (Best’s News Service, July 19, 2016).
The rule’s critics say it would tighten conflict-of-interest rules under the Employee Retirement Income Security Act. Among the concerns are that the rule would hike compliance and oversight costs, while increasing legal exposure for independent insurance agents and brokers (Best’s News Service, May 25, 2016). Several lawsuits have been filed against the rule, including one by the American Council of Life Insurers, which argues that the Labor Department overstepped its authority (Best’s News Service, June 9, 2016).
NCOIL’s resolution said the rule “would threaten the proven state-based legislative and regulatory structure by imposing a vague and burdensome fiduciary standard on nonfiduciary sales relationships, thereby upending the retirement savings marketplace.”
Frank O’Brien vice president, state government relations at the Property Casualty Insurers Association of America, said life insurers have the most direct interest in the resolution, but said the PCI is monitoring the issue because “the rule is just one of a number of developments that showcase an increasing, and in many ways concerning, increase in the intrusion or role of federal regulators in the state-based insurance system.”
Discussions about what NCOIL will do to address concerns about the use of big data by insurers are scheduled to continue in the Property/Casualty Committee, chaired by Indiana state Rep. Matt Lehman.
Joe Thesing, vice president, state affairs at the National Association of Mutual Insurance Companies, told Best’s News Service that it remains unclear as to whether the big data talks within NCOIL will ultimately lead to some kind of legislation.
Minutes from the committee meetings in Portland show Lehman was attempting to address issues such as data ownership, privacy, whether carriers will require certain technology to be used and whether insurers will disclose what they are gathering. Tom Considine, NCOIL Chief Executive Officer, told Best’s News Service in August that legislators during the Portland meetings told him privately that consumers should own the data they produced (Best’s News Service, Sept. 2, 2016).
Ron Jackson, vice president for state affairs in the American Insurance Association’s Southeast Region, said that NCOIL has to narrow down what is meant by discussing big data and said any kind of one-size-fits-all approach would inhibit the market or have unintended consequences.
The Property/Casualty Committee also will consider a Model Towing Act, to be introduced by Lehman, that would “establish minimum standards for towing vendor services and to promote fair and honest practices in the towing service business.” Among the legislative provisions is one that prevents towing companies from soliciting for emergency towing services at the scene of an accident.
Thesing said NAMIC is cautiously optimistic that the towing model legislation will be favorably accepted when it is introduced in the committee. He said the idea is to create a reasonable, rational and predictable model to have towing companies provide written estimates and other information that will help insurers know what the costs are up front.
(By Thomas Harman, Washington Bureau manager, BestWeek: Tom.Harman@ambest.com)
