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Big "I" Disappointed with NAIC Action on MLR Recommendations

Calls on NAIC and HHS to address agent/broker compensation in MLR calculations.

WASHINGTON, D.C., Oct. 21, 2010 — The Independent Insurance Agents & Brokers of America (IIABA or the Big “I”) expressed disappointment with the adoption of a model regulation by the National Association of Insurance Commissioners (NAIC) that recommends to the Department of Health and Human Services (HHS) how to implement the medical loss ratio (MLR) provisions of the new health care reform law. The NAIC today approved its recommendations without having a vote on a critical amendment for the agent and broker community.

 “The Big ‘I’ is disappointed with the final MLR recommendations, and we are greatly concerned that there was no up-or-down vote on the amendment to exclude agent compensation from the proposed methodology for calculating MLRs,” says Robert Rusbuldt, Big “I” president and CEO. “The bipartisan amendment was cosponsored by 15 state insurance commissioners (including two NAIC officers) yet was not considered by the NAIC. The irregular process by which the issue was handled today is a disappointment to independent insurance agents and brokers across the country.” 

The lead sponsors of the Big “I” supported amendment to remove agent commissions from the MLR calculations were Michael Bertrand, Vermont commissioner of banking, insurance, securities and health care administration, and Mike Chaney, Mississippi commissioner of insurance. The Big “I” applauds Commissioners Bertrand and Chaney and looks forward to continuing to work with the large number of state insurance regulators committed to resolving the concerns of the nation’s insurance producers.

In a nod toward the importance of the issue, the NAIC today created an executive level committee tasked with specifically examining agent broker compensation issues and to work with HHS. The key supporters of the withdrawn amendment will be included in the new group, and the proposed amendment will remain on the table and be one of the items considered in greater detail.  The Big “I” urges the committee to quickly convene and work toward a viable solution.

“The Big ‘I’ is very concerned that the MLR provision of the new health care reform law will have a devastating effect on the private marketplace and that consumers will be negatively impacted,” says Charles E. Symington Jr., Big “I” senior vice president for government affairs. “If the NAIC and HHS do not fix this language, the role of the agent in the health care delivery process could be diminished, which would lead to market disruption and considerable consumer confusion.”

Throughout the process, the Big “I” has urged the NAIC to exclude agent commissions from the MLR administrative definitions. The Big “I” has argued that these agent commissions are passed 100% to third parties and are therefore pass-through fees that should not be included in the administrative definitions.

Founded in 1896, the Big “I” is the nation’s oldest and largest national association of independent insurance agents and brokers, representing a network of more than 300,000 agents, brokers and their employees nationally. Its members are businesses that offer customers a choice of policies from a variety of insurance companies. Independent agents and brokers offer all lines of insurance—property, casualty, life, health, employee benefit plans and retirement products. Web address:


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