Majority of State Insurance Regulators, Charged With Implementing Federal Health Reform, Have Ties to the Insurance Industry

Mar 22, 2011, 09:32 ET from Consumer Watchdog

WASHINGTON, March 22, 2011 /PRNewswire-USNewswire/ -- A majority of the National Association of Insurance Commissioners (NAIC), which is meeting in Austin, Texas, this week to make key decisions on issues that will determine how much Americans have to pay for health insurance, have ties to the insurance industry, according to an analysis released today by Consumer Watchdog.

Twenty-four of the state insurance commissioners worked for the insurance industry before being appointed and two were elected with insurance industry campaign contributions according to the Consumer Watchdog analysis. Six past presidents of the NAIC exited since 2000 to work for the insurance industry as lobbyists and consultants.

Consumer Watchdog called on the NAIC to ban commissioners from lobbying their former colleagues when they leave to work for the insurance industry and from taking a job in the industry for at least a year after leaving office, for governors to reconsider appointments of long-time insurance industry executives, and for states to prohibit insurance industry campaign contributions to insurance commissioner candidates.

"The insurance commissioner holds the state's top consumer protection job, with enormous impact on the price of consumers' health insurance. Commissioners shouldn't be regulating former employers or campaign supporters," said Carmen Balber, Washington director for Consumer Watchdog. "With the National Association of Insurance Commissioners becoming such a prominent voice in health reform implementation, it's critical that we close the revolving door between the insurance industry and regulators."

Among the insurance commissioners with insurance industry ties, several were recently appointed by new Republican governors who are actively fighting federal health reform:

  • David Black of South Carolina – President and CEO of Liberty Life
  • Ted Nickel of Wisconsin – Director of Governmental and Regulatory Affairs at Church Mutual Insurance Company
  • Michael Consedine of Pennsylvania – Partner and Vice-Chair of law firm Saul Ewing's Insurance Practice Group

Two elected commissioners count the insurance industry as their top campaign contributors, according to the National Institute on Money in State Politics:

  • Georgia Commissioner Ralph Hudgens$149,402
  • Kansas Commissioner Sandy Praeger$208,792

Of the six NAIC presidents from the last decade who now work for the insurance industry, two became the top Washington lobbyists for their insurance firms:

  • George Nichols, leads New York Life's Office of Governmental Affairs
  • Alessandro Iuppa, hired to Head Government and Industry Affairs, North America, for Zurich Financial Services

The insurance industry's dominance at the NAIC may cause trouble this Sunday, when the body will vote whether to back legislation that would increase consumers' health insurance premiums. The legislation would remove sales commissions from insurers' administrative costs, crippling the cap on administrative expenses and profits known as the "medical loss ratio" contained in the federal Affordable Care Act, said Consumer Watchdog.

Among the other health reform implementation issues the NAIC will consider in Austin are: a proposal by brokers that only licensed individuals (like brokers) be allowed to help people navigate new health insurance exchanges, proposals for organizing the state exchanges, and proposed rulemaking for rate review programs. There has also been a push by health insurers and brokers to reopen regulations on the medical loss ratio with further amendments, including an effort to reclassify claims reporting and fraud-related functions as health-related instead of administrative costs, and removing the Department of Health and Human Services' authority to require states prove they will experience serious market disruptions in order to obtain a waiver to the medical spending rules.

Kevin McCarty, Commissioner at Florida's Office of Insurance Regulation, proposed the legislation on behalf of the insurance sales lobby. McCarty was at the center of an ethics scandal for soliciting campaign contributions from the insurance industry for the relative of a fellow regulator. (See the St. Petersburg Times: http://www.sptimes.com/2007/04/20/State/Inquiry_sought_over_i.shtml)


Insurance Commissioners With Industry Ties

Insurance Commissioner

State

Former Insurance Industry Employer & Campaign Contributions

Jim L. Ridling

AL

Fireman's Fund Insurance

Linda S. Hall

AK

Chartered Property Casualty Underwriter

Christina Urias

AZ

Property & casualty claims adjuster; insurance defense attorney

Jay Bradford

AR

First Arkansas Insurance Group (agency network)

Thomas B. Leonardi

CT

Northington Partners, Inc.; Beneficial Corporation

Karen Weldin Stewart

DE

Reinsurance Solutions International among others

William P. White

DC

Prism Strategies

Ralph T. Hudgens

GA

Insurance industry is his top donor: $149,402

William W. Deal

ID

W.W. Deal Insurance Agency

Stephen W. Robertson

IN

Conseco Insurance Group

Sandy Praeger

KS

Insurance industry is her top donor: $208,792

Elizabeth "Beth" Sammis

MD

United Healthcare

Mike Rothman

MN

Winthrop & Weinstine, P.A.

Mike Chaney

MS

Formed MMA Workers Compensation Insurance Pool; $28,050 in industry campaign contributions

John M. Huff

MO

Swiss RE; GE Insurance Solutions

Roger A. Sevigny

NH

Travelers Insurance

Thomas B. Considine

NJ

MetLife, Inc.

John G. Franchini

NM

Consolidated Agency

James J. Wrynn

NY

MacKay Wrynn & Brady, LLP

John D. Doak

OK

Farmer's Insurance Agency; Marsh; Aon among others

Michael F. Consedine

PA

Saul Ewing LLP

David Black

SC

Liberty Life Insurance Company

Merle D. Scheiber

SD

Hometown Insurers Inc. among others (agency)

Julie Mix McPeak

TN

Burr & Forman LLP

Jacqueline K. Cunningham

VA

Assistant Director of Compliance for a life insurer

Ted Nickel

WI

Church Mutual Insurance Company





Past NAIC Presidents Who Exited to Work for the Insurance Industry

Former President

Term

Industry Position

Walter Bell

2007

Swiss RE, North American Chairman

Alessandro Iuppa

2006

Zurich Financial Services, main DC lobbyist

M. Diane Koken

2004-05

Legal/regulatory consultant to insurance companies

Ernie Csiszar

2004

CEO of Property Casualty Insurers of America, corporate executive positions in industry

J. Michael Pickens

2003

Law practice representing insurers, consultant with the Cambridge Group

George Nichols

2000

New York Life, chief lobbyist




Download the Consumer Watchdog analysis with background on insurance commissioners' insurance industry ties here: http://www.consumerwatchdog.org/resources/naicindustryties.xls.

Consumer Watchdog is a nonpartisan consumer advocacy organization with offices in Washington, D.C. and Santa Monica, CA. Find us on the web at: http://www.ConsumerWatchdog.org.

SOURCE Consumer Watchdog



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