| Advisory opinion regarding whether James Donelon, Commissioner of Insurance and President of the National Association of Insurance Commissioners (NAIC), may travel on behalf of the NAIC to various meetings, functions, and speaking engagements and receive reimbursements from the NAIC for the travel. |
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During 2013 and 2014, as an officer of the NAIC, Commissioner Donelon will be required to travel on behalf of the NAIC to various meetings, events, functions and speaking engagements. The NAIC is a standard setting organization whose members are the elected or appointed state government officials who along with their departments and staff regulate the conduct of insurance entities in their respective state or territory. According to the NAIC, its primary mission is to assist state insurance regulators, individually and collectively, in serving the public interest and in achieving fundamental insurance regulatory goals in a responsive, efficient and cost effective manner, consistent with the wishes of its members.
The NAIC is a not for profit organization which has been granted an exemption from income taxes by the Internal Revenue Service under the provisions of Section 501(c)(3) of the Internal Revenue Code and a similar provision of the law in Delaware, the NAIC's state of domicile. The NAIC, because of its unique purpose, structure and the nature of its activities and relationship to the states, is exempt from filing 990 tax forms. The NAIC would have to pay taxes on any unrelated business income.The NAIC is not regulated by the (LDI). The LDI does pay, as does every state, a state assessment fee to the NAIC.
This assessment fee is used by the NAIC to support funding, information, products and services provided to states (Louisiana included) as a benefit of its membership in the NAIC. According to the records of the NAIC, the services and benefits received by the State exceed the annual membership assessment.
In addition to his duties as Commissioner of Insurance for the State of Louisiana, as an officer of the NAIC, the Commissioner is required to do additional travel to represent the NAIC at various meetings, events, functions and speaking engagements. This travel is performed by the Commissioner as an officer of the NAIC and not as the Commissioner of Insurance of the State of Louisiana. The NAIC pays or reimburses its officers directly for the additional travel, lodging and related expenses connected with their duties as an officer of the NAIC. No compensation is received because of the Commissioner's service as an officer of the NAIC.
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Section 1115 of the Code prohibits a public servant from soliciting or accepting a "thing of economic value" from persons that have or are seeking a business, financial, or contractual relationship with their public agency, persons regulated by their agency, and persons that have substantial economic interests which can be substantially affected by the performance of the employees' duties.
Section 1123(1) of the Code provides an exception to permit a public servant to participate in the affairs of a charitable or public service organizations when no compensation is received.
Section 1123(41)(a) of the Code allows the acceptance by a public servant of complimentary admission to, lodging reasonably related to, and reasonable transportation to and from an educational or professional development seminar or conference held in any state of the US or Canada, provided that (1)the public servant is requested or invited to attend by the sponsoring nonprofit organization, (2) the sponsor is not a person seeking to have legislation passed, (3) the seminar or conference is related to the public service of the servant and (4) the public servants agency head approves the acceptance.
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Adopt the proposed advisory opinion.
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| Assigned Attorney: |
Aneatra Boykin |
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