AITC Comments on Draft NAIC Model Unfair Trade Practices Act (Rebates)

July 15, 2020

Commissioner Jon Godfread
National Association of Insurance Commissioners
444 North Capitol Street NW Suite 700 Washington, DC 20001

Attention: Denise Matthews, Director, Data Coordination and Statistical Analysis

Commissioner Godfread: Thank you for the opportunity to provide public comments on the NAIC’s Section 4(H) of NAIC Model Unfair Trade Practices Act (“Rebates”). This comment letter is submitted on behalf of the American InsurTech Council (“AITC”). AITC is the independent voice for insurtechs, traditional insurance companies and agencies, and other stakeholders sharing common goals and objectives before state insurance regulators and the NAIC, federal and state legislators, other policymakers, the media and the general public.

We are writing in support of the proposed changes to the Unfair Trade Practices Act. Rebating has been an ongoing issue with many insurtech efforts, and regulation of this area by the states has been, at best, inconsistent. Many states have had the same strict anti-rebating laws in place for decades, while some states have essentially eliminated their anti-rebating statutes. Other states have allowed for more flexibility, albeit only in a “sandbox” or through regulatory discretion. While each state’s regulatory regime should reflect the values in the state, this inconsistency across state lines has created problems for the industry and has harmed some consumers.

The proposed approach in the model clearly reflects a middle ground. It provides insurers and their affiliates with certainty, creates appropriate standards and eliminates unfairly discriminatory practices while still allowing companies the flexibility to meet ever changing consumer needs. We believe any insurtech regulatory proposal should meet the following tests:

1. Protect consumers including protecting consumers from discriminatory practices

2. Provide consistent regulatory standards across the industry and across states

3. Ensure that the insurtech industry has the flexibility to meet emerging consumer needs

We understand that this is just the first step in developing a modern, uniform approach to the issue of rebates. The proposed changes to the model will assist regulators and the industry in properly managing this transformation until insurtech becomes insurance. Similarly, we note that as the pace of change in our industry continues to increase other changes to existing regulatory standards will need to be considered to keep pace with change and ensure this market continues to work for everyone.

Thank you for the opportunity to provide public comments on this important document. We look forward to working with you. If you have any questions please do not hesitate to contact us at the email addresses below.

Respectfully Submitted,

Scott Harrison (sharrison@americaninsurtech.com)
Jack Friou (jfriou@americaninsurtech.com)
The Hon. Thomas Mays (tmays@americaninsurtech.com)
Teri Hernandez (thernandez@americaninsurtech.com)
JP Wieske (jpwieske@americaninsurtech.com)

Co-Founders, American InsurTech Council.