The Consumer Federation of America on Wednesday accused an insurance trade group of undermining efforts to make more uniform states' regulation of the business.

"The National Association of Independent Insurers has been making a bold attempt to undo the progress and to weaken the capacity of state regulation to deal with issues on a national basis," said a report by Robert Hunter, director of insurance at the federation, whose members include 240 consumer groups.

The insurance trade group has "gone so far as to suggest, in a thinly veiled threat, that its member insurers not pay certain fees to the National Association of Insurance Commissioners," the report found.

The National Association of Insurance Commissioners is the professional group for state insurance regulators. The association evaluates the quality of each state's regulators and develops common standards.

The group, funded primarily by the insurance industry, plays this role because the industry is not regulated by the federal government.

Bankers, Mr. Hunter said, should support the commissioners' efforts, because the more uniform insurance regulation becomes, the easier it will be for banks to enter the business.

The National Association of Independent Insurers, while supporting state regulation, opposes the NAIC's growing independence.

"We have concerns about the way (NAIC) has grown into a more and more centralized authority, with no due process, no accountability, and no budget accountability," said Jack Ramirez, the president-elect of the insurance trade group.

According to the Consumer Federation, NAII sent a letter to members March 15 raising the possibility with withholding payments to the NAIC.

Mr. Ramirez denied the implication that his organization was trying to pressure state commissioners. "This is not a boycott," he said. "There's been a lot of concern because some companies have not been paying their database fees.

"We sent the letters out to make clear ... it is the members' decision not to pay," he said.

Mr. Ramirez said some members have stopped paying dues and that his group has major concerns about the expanded role of the commissioners association.

Mr. Smith writes for Medill News Service.

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