Commissioner Goodwin Leads National Discussion of Readability Standards for Insurance Policies

NAIC public hearing explores the issue of the use of consumer-friendly, "plain language" in insurance policies

Insurance Commissioner Wayne Goodwin announced his participation in the national discussion surrounding the need for insurance policies - particularly health insurance policies - to use plain, more consumer-friendly language.

The National Association of Insurance Commissioners (NAIC) held a public hearing in mid-March made up of three panels of insurance regulators, NAIC consumer representatives and insurance industry representatives which provided testimony and presentations at the hearing. In his role as the chair of the Consumer Connections Working Group, Commissioner Goodwin led the public hearing and discussion in Denver.

"Today's hearing provides an important starting point for discussion on the issue of insurance contract readability standards," said Commissioner Goodwin. "The current economic downturn makes it increasingly important that consumers are able to understand their insurance policies so they are not at a financial disadvantage and can make well-informed decisions about their insurance needs."

The readability hearing focused on the following issues:

To which lines of insurance should readability standards apply?

Should an entire insurance policy be required to be scored?

Should defined terms in a policy be included in the scoring process?

Should the readability standard score continue to be the current Flesch Reading Ease Score (a number from 0 to 100) or should it be changed to another measure (such as the Flesch-Kincaid Grade Level)?

What other logistical questions are states likely to encounter if they move forward to revise their standards?

In addition to chairing the NAIC Consumer Connections Working Group, Commissioner Goodwin serves on the Consumer Participation Board of Trustees as one of only five state insurance regulators represented.

Goodwin's participation in these groups is another example of his Good Government Initiative, which strives to increase transparency, access and customer service in state government. Other Good Government Initiative projects of Goodwin's include the Department's online suggestion box, added Web presence through social media sites and a mobile Web site, as well as a general increase in consumer outreach and public availability.