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Statement from NAIC President Jane Cline and
Health Committee Chair Sandy Praeger

WASHINGTON, D.C. (Feb. 25, 2010) — National Association of Insurance Commissioners (NAIC) President, West Virginia Insurance Commissioner Jane Cline, along with NAIC Health and Managed Care Committee Chair, Kansas Insurance Commissioner Sandy Praeger, today issued the following statement in regard to the White House Health Reform Summit:

“There has been a lot of discussion about a provision in the President‘s health care reform plan that would grant the Secretary of Health and Human Services some authority over proposed health care premium increases.

“The state insurance regulators, represented by the NAIC, have been working closely with the congressional drafters and the administration to make certain the legislation preserves the critical role of state regulators and continues the use of objective standards in the rate review process. We understand that the final language will simply establish a federal backstop to assist those regulators who currently do not have full rate review authority under state law and ensure that proposed rate increases are truly justified and receive a thorough review before they become effective, and we understand the new federal authority would not be used to overturn state determinations. We support this concept of a federal-state partnership, as states are in the best position to make objective, actuarially-based determinations about the appropriateness of health insurance premiums. We appreciate the willingness of Secretary Sebelius, Senator Feinstein and Representative Schakowsky to work with state regulators to enhance rate review across the country.

“State insurance regulators are very pleased that the President‘s overall proposal emphasizes state-based reforms. The plan includes state-designed Exchanges and considerable flexibility for states to implement the federal standards in a way that best meets the needs of their populations.

“We also applaud the insurance market reforms which guarantee that individuals will be able to purchase insurance even with pre-existing conditions and ensure that individuals are not rated based on health status. However, we remain concerned about the inadequacy of the individual mandate which could lead to a dysfunctional marketplace and higher rates for consumers. We are hopeful this critical issue will be addressed.

“Finally, the members of the NAIC are strongly opposed to any bill in which the federal government allows insurance carriers to sell their products in our states using the regulatory rules of another state. This misguided proposal would increase premiums for those who need insurance the most and eliminate important consumer protections. It would also fragment the insurance market and expose consumers to increased fraud and abuse. This concept must be rejected and the decision whether to allow, and under what conditions to allow, interstate sales of insurance should be left up to the individual states.”

About the NAIC

Formed in 1871, the National Association of Insurance Commissioners (NAIC) is a voluntary organization of the chief insurance regulatory officials of the 50 states, the District of Columbia and five U.S. territories. The NAIC has three offices: Executive Office, Washington, D.C.; Central Office, Kansas City, Mo.; and Securities Valuation Office, New York City. The NAIC serves the needs of consumers and the industry, with an overriding objective of supporting state insurance regulators as they protect consumers and maintain the financial stability of the insurance marketplace. For more information, visit

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