NAIC Working to Extend Authority Over Health Insurance Lead Generators

Late last month, the NAIC Improper Marketing of Health Insurance (D) Working Group met in a public session to discuss revisions to the Unfair Trade Practices Act (Model# 880) to include health insurance lead generators. The main thrust of the proposed revisions is to extend the prohibited practices of Section 4 of the Unfair Trade Practices Act to health insurance lead generators and to impose upon lead generators record keeping requirements subject to examination by state insurance regulators. The health insurance industry, as represented by AHIP, publicly supports the proposed revisions to the Unfair Trade Practices Act as do multiple consumer representatives.

State regulators are debating specifics of statutory interpretation and other technical matters so as to effectively extend authority over health insurance lead generators without over-extending to inadvertently include employers and other unintended targets. At last month’s public session, Missouri proposed technical revisions which received a friendly reception from the rest of the working group. [1] It is anticipated that revised language will be publicly released for public comment prior to the working group’s open session meeting on Monday August 14, 2023, as part of the NAIC Summer National Meeting.

Readers will recall the anger expressed by the regulators at the Spring National Meeting. While those feelings have not subsided the discussions since then have been calm as stakeholders have largely coalesced around agreed terms. It is very likely, that by the end of the year, the NAIC Executive Committee & Plenary will approve final revisions to the Unfair Trade Practices Act, extending regulatory authority over health insurance lead generators.

[1] As a revised draft 4 reflecting Missouri’s comments has not yet been posted, the public comments submitted by Missouri can be viewed here.