Legislation adopted by the NAIC is not binding on federal regulators, but it does carry political weight because insurance is regulated at the state level. That's why more than two dozen unions, consumer groups and liberal associations wrote to the NAIC on Tuesday to oppose the draft legislation.
"Producers' commissions are clearly an administrative cost," the letter states. "This proposed legislation would allow insurers to push these significant administrative expenses off the books, making administrative spending look artificially low in the calculation of the medical loss ratio... Put simply, the (medical loss ratio) will no longer be a useful benchmark for consumers."
The letter comes as Florida has joined Maine, New Hampshire, Nevada and Kentucky in asking for a waiver from the medical loss ratio requirement.
Maine last week became the first state to be granted its three-year waiver request.
Rep. Mike Rogers (R-Mich.) has said he would soon introduce legislation protecting agents and brokers, and several Democrats have expressed their support.