We all love to hate insurance. It's easy to loathe paying the premiums, rant about coverage limitations and gnash your teeth at rate hikes.
Sandy Praeger polices the activity of
insurance companies and agents in her state, as the
Kansas Insurance Commissioner and National Association
of Insurance Commissioners, or NAIC, president-elect.
An authority on fair and unfair insurance practices,
she shares her thoughts on hot button-issues such
as Comprehensive Loss Underwriting Exchange, or CLUE,
reports used to figure out your risk profile and the
use of insurance scoring to make pricing decisions,
contending that there is a positive side to the insurance
industry, after all.
|At a glance
But first: What is the NAIC?
For the benefit of people who have never heard of the National Association of Insurance Commissioners, what is it that your organization does?
are an association of all of the insurance regulators
in the U.S. and its territories. We have been in existence
since 1871. It's the oldest association of state entities.
Our primary goal is to work together to improve insurance
regulation in our states. It's important we do that
because insurance is regulated at the state level.
However, many of the companies we regulate are in
all of our markets, so having consistency in regulation
makes the regulation more effective.
It also eliminates the unnecessary bureaucracy
that can add to cost, which is a prime issue that
consumers are concerned about. If we see changes in
the marketplace that we feel are saying we need to
be changing our state laws, we assign that to a committee
with the NAIC. We develop models that states can then
use as guidelines to adopt legislation back in their
individual states. That works as a very effective
way to promote uniformity as much as possible.
The market changes usually are across the board; sometimes they're more regional. For example, what the Southeast is dealing with after all of the hurricanes, they have market conditions there that are different than perhaps market conditions I have in Kansas -- although not so much this year with all the tornadoes and floods that we've had.
The ability to work together to address
the changing environment and make sure our regulations
are appropriate do two things really: promote a competitive
marketplace -- a good competitive marketplace is good
for consumers -- and provide that interaction with
consumers to make sure that when they buy an insurance
product, the promise to pay that's inherent in that
product is upheld.