Critics Blast NAIC State-Accreditation Program as Unconstitutional
December 1, 2018 by Elizabeth Festa
The National Association of Insurance Commissioners’ state accreditation program is unconstitutional because it can coerce states to pass laws, and the NAIC itself has an outsize influence on insurance regulation, critics argued Thursday.
Speaking at the Consumer Federation of America’s financial services conference in Washington, Daniel Schwarcz, professor of law at the University of Minnesota, argued that the NAIC’s state accreditation program is not subject to administrative law, which means the NAIC is not subject to the same laws or procedures that states are.
The NAIC acts as a government entity but has none of the accountability of a government entity, Schwarcz maintains.
“Quite frankly, it’s unconstitutional,” Schwarcz said.
The NAIC’s accreditation program was created to establish and maintain financial regulation standards in each state.
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