What is the NAIC?
- It is unprecedented that the Federal Government would give such power to a private trade association—I repeat, a private trade association—or to what NAIC immediate past resident Walter Bell of Alabama in an April 9, 2007, letter called: ‘‘a 501(c)(3) nonprofit corporation with voluntary membership and not a State government entity.’’
- This NAIC president went on to say that: ‘‘When individual insurance commissioners gather as members of the NAIC, they are not considered a governmental entity or a public body as defined by the various open meeting laws, but rather are a private group.
- As an organization, the NAIC does not have any regulatory authority.’’ (p14)
-- Brian P. Kennedy, Representative, Rhode Island House of Representatives, and President, National Conference of Insurance Legislators (NCOIL)
2008 0610 - GOV - H.R. 5840, The Insurance Information Act of 2008
James Schacht (IL):
1. NAIC History and Purpose
For 110 years, the NAIC's original objects of promoting uniformity were carried forward and remained virtually unchanged.
With the adoption of a new Constitution in 1981, however, the NAIC's purposes were restated in the form of the following three summary statements:
- Maintenance and improvement of state regulation of insurance in a responsive and efficient manner.
- Reliability of the insurance institution as to financial solidity and guarantee against loss.
- Fair, just and equitable treatment of policyholders and claimants.
- (See NAIC Proceedings 1981 Vol. I pp. viii and xx.) (p174)
2. NAIC As A Legal Entity
Until it changed its Bylaws in June 1989, the NAIC considered itself a quasi-governmental, non-Section 501(cX3) organization.
Moreover, in the past, the Internal Revenue Service has consistently viewed the NAIC as an instrumentality of state
government for the purpose of federal tax exemptions under FICA and federal excise and unemployment taxes. Likewise, in the past, the states of New York and Wisconsin did not recognize the NAIC as a 501(cX3) organization for unemployment tax purposes. The only recorded reason for the 1989 Bylaw changes was that they were "technical changes we need for IRS ... clarification relative to the taxation status of some of our activities." (NAIC Proceedings 1989 Vol. II p. 10.)
1995-1, NAIC Proceedings