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» PodcastsUp to 11 Commissioners Could See Terms End After 2012 Elections
By Jeff Jeffrey
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As many as 11 insurance commissioners could see their terms come to an end in 2012, either because they are part of gubernatorial administrations that are up for re-election on Nov. 6 --- or they face elections of their own.
The five commissioners facing elections this year include Wayne Goodwin of North Carolina; Adam Hamm of North Dakota; Monica Lindeen of Montana; Mike Kreidler of Washington State; and Karen Weldin Stewart of Delaware.
Goodwin, a Democrat, was elected North Carolina insurance commissioner in 2008. A former member of the State House of Representatives, Goodwin oversaw the insurance response to Hurricane Irene. He and Democratic Gov. Beverly Perdue have been critical of the National Flood Insurance Program's claims adjustment process, saying that adjustments have been too often late, incomplete or not done at all (Best's News Service, Nov. 1, 2009). With insured property damage exceeding $500 million, North Carolina was one of the three states hardest hit by the Aug. 27 hurricane, according to Verisk Analytics Inc. (Best's News Service, Oct. 18, 2011).
Hamm, a Republican, was appointed North Dakota insurance commissioner in October 2007 by Gov. John Hoeven and was elected to a four-year term in November 2008. He was recently elected vice president of the National Association of Insurance Commissioners and has played an active role in a number of issues facing the organization.
As chairman of the Life Insurance and Annuities Committee, Hamm has been involved in the NAIC's consideration of how to advise life insurers on interpreting Actuarial Guideline 38, which addresses reserves for universal life insurance policies with secondary guarantees (Best's News Service, Nov. 5, 2011).
Prior to becoming commissioner, he served as a prosecutor for the Cass County State's Attorney's Office.
Lindeen, a Democrat, also serves as an NAIC officer, having been elected secretary-treasurer at the organization's fall meeting in November (Best's News Service, Nov. 5, 2011). She was elected commissioner of securities and insurance in 2008 and also serves Montana's state auditor. She was a member of the Montana House of Representatives from 1999 to 2006.
In November, Lindeen was one of seven commissioners appointed to the Federal Advisory Committee on Insurance by the U.S. Treasury Department (Best's News Service, Nov. 2, 2011).
Kreidler, a Democrat, is serving his third term as Washington State's insurance commissioner. Kreidler is an optometrist and practiced at Group Health Cooperative in Olympia, Wash., for 20 years. He served as a member of the Northwest Power Planning Council and a regional director for the U.S. Department of Health and Human Services, according to his online biography. In 1993, he was elected to Congress and served for one term.
Last month, Kreidler ordered Geico to refund $7.5 million by the end of the year after overcharging its Washington state customers. The automobile insurer was also fined $100,000 in relation to the overcharges (Best's News Service, Dec. 22, 2011).
Stewart, a Democrat, was elected in 2008 and has led the state's effort to become a leading captive domicile. Stewart oversaw the 2009 launch of the Delaware Insurance Department's Bureau of Captive and Financial Insurance Products, which was designed to focus its captive management and recruitment efforts (Best's News Service, Aug. 10, 2009). Since then, Delaware has passed the 100th captive licensing mark (Best's News Service, May 10, 2011). Delaware reported the second-greatest number of new captives in 2010, licensing 48 new captives that year (BestWire, Feb. 22, 2011).
None of the commissioners facing re-election have officially announced their candidacy yet, but those announcements would have to come relatively soon. In North Carolina, for example, candidates must file by Feb. 29 to compete in the May 8 primary, according to the North Carolina Board of Elections.
Goodwin, who is expected to run for re-election, will have at least one challenger this fall. Republican Mike Causey has announced he plans to run for insurance commissioner, marking his fourth campaign for the job. Causey lost his previous bids for commissioner in 1992, 1996 and 2000.
While commissioners from six other states aren't facing elections of their own, they serve at the will of the governor and could see their terms end as a result of the elections.
Governors in Indiana, New Hampshire, Missouri, Utah, Vermont and West Virginia are all facing re-election in the fall.
From a national perspective, perhaps the most interesting gubernatorial election is the one in Missouri. Missouri Insurance Director John Huff, who was appointed by the state's Democratic governor Jay Nixon in 2009, currently serves as one of two non-voting members of the Financial Stability Oversight Council. Under the Dodd-Frank Act, FSOC has been charged with identifying and responding to potential systemic risks to the U.S. economy. Some have argued that large insurance companies should be counted among those potential risks.
Should Nixon lose in November, it could mean that Huff's seat on FSOC could become vacant. That said, it is common for insurance commissioners to remain in office, despite a change in governor.
Industry representatives and state regulators from both parties, including Huff, have routinely argued that the financial crisis showed that the existing state-led regulatory structure in the United States is effective in monitoring the solvency of insurance companies.
Donelon Wins New Term in Louisiana Landslide
By Sean P. Carr and Jeff Jeffrey
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Jim Donelon |
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Donald Hodge |
Louisiana Insurance Commissioner Jim Donelon cruised to victory Oct. 22, winning election for a third time by besting challenger Donald Hodge with a two-to-one margin.
With just one opponent in the race, Donelon, a Republican, won an outright victory in the first round of voting. Under Louisiana's "open primary" system, all candidates regardless of party appear on the same ballot. If any candidate receives more than 50% of the vote, he or she automatically wins the office.
With all precincts reporting, the final vote was 651,285 to 313,931, or 67.5% to 32.5%.
Donelon, 66, served in the state House for 10 years, representing some of New Orleans largest suburbs, including a tenure as chairman of the insurance committee. Donelon joined the staff of the Louisiana Department of Insurance in 2001 and was appointed commissioner in February 2006. He won election to an unexpired term later that year and was re-elected in 2007. He is currently vice president of the National Association of Insurance Commissioners.
Donelon ran on a platform of working to bring new insurers into the state by "telling the Louisiana story" and how both the governor and the state legislature supported "our efforts to do a private sector-based recovery as opposed to a government takeover of the property insurance market." Donelon said when pitching insurance companies on entering the Louisiana market, he also emphasizes the state's $100 million incentive program that was set up after Katrina to attract new insurers to the state (Best's News Service, Oct. 10, 2011).
He has also has taken a wait-and-see approach to implementing federal health care reform. Donelon criticized fellow Republican Gov. Bobby Jindal's decision to not move toward forming a health insurance exchange -- which leaves the door open for the federal government to do so. However, he also said he wanted to await the Affordable Care Act's fate in the courts before going too far in implementing it.
Hodge, 31, is a Baton Rouge, La.-based attorney who has worked in a number of social service positions. A Democrat, Hodge worked as a legal and social service advocate at Catholic Charities of the Diocese of Baton Rouge and the Louisiana Family Recovery Corps, helping families that had been displaced by hurricanes. In 2008, Hodge led an unsuccessful campaign for a seat on the East Baton Rouge Parish Metropolitan Council.
Hodge attacked Donelon for accepting campaign contributions from insurance companies he regulates. He called such donations, which are legal in Louisiana, unethical. He pledged to work with the state legislature to make the insurance commissioner post an appointed position, thus removing political donations from the process.
According to campaign finance reports filed with the Louisiana Ethics Administration Program, Donelon raised $413,000 and spent roughly $335,000 of that. Hodge raised $114,000, thanks in large part to $80,000 in loans he received. He spent about $6,000 on his campaign.
Louisiana Voters OK Constitutional Shield for MPL Fund
By Sean P. Carr
Voters in the Bayou State approved a constitutional amendment to protect the state's medical professional liability insurance fund. The vote blocks future state lawmakers from raiding the $676 million fund to balance state budgets.
The Oct. 22 vote was 475,331 to 416,309, or 53.3% to 46.7%, with all precincts reporting.
The Patient's Compensation Fund offers coverage for qualified health care providers who already have either MPL insurance or self-insurance to cover the first $100,000 in liabilities. Created by state statute in 1975 and once state-funded, it is currently funded by surcharges on approximately 17,000 health care providers. It is considered a state agency, not an insurance company; however, its assets are not considered public funds.
There is no current or recent threat to the fund. Both legislative houses voted unanimously to place the question on the ballot (Best's News Service, Oct. 10, 2011).
A leading supporter was the Louisiana Medical Mutual Insurance Co., which holds about half of the MPL insurance market share in Louisiana, according to BestLink. Other backers included the Louisiana State Medical Society, Louisiana Hospital Association and the Louisiana Nursing Home Association. The measure has no organized opposition.
The fund received $171 million in revenue and paid $116 million in claims and administrative expenses in the most recent fiscal year, according to the independent Public Affairs Research Council of Louisiana. The previous year, it was $186 million in and $135 million out.
The top five writers of medical professional liability insurance in Louisiana in 2010, were Louisiana Medical Mutual Insurance Co., with a 50.2% market share; CNA Insurance Cos., with 9.7%; Health Care Indemnity Inc., with 9.4%; American International Group, with 5.4%; and Berkshire Hathaway Insurance Group, with 3.7%, according to BestLink.
Mississippi's Chaney Seeks Second Term,
Regulatory Swing 'Back Toward the Middle'
By Sean P. Carr
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Mississippi Insurance Commissioner Mike Chaney is seeking election to a second term in what he sees as a dramatically changing regulatory landscape.
From the Affordable Care Act to the implications of Dodd-Frank, federal legislation has become much of the focus of a state regulator, Chaney said. The advent of Solvency II and proposed counterpart changes in the United States also has him concerned about a potential weakening of U.S. standards.
"We've probably had more changes in the last four years in the regulation of insurance than we had in the previous 100," Chaney said. "It seems like the pendulum has swung from one extreme to the other and it needs to be back towards the middle."
Then a state Senator, Chaney, 67, had planned on retiring until the opportunity to run for insurance commissioner came up four years ago. Now, he is running for re-election in the Nov. 8 general election. The three-way contest includes Elmer L. "Louis" Fondren, a state representative in the 1970s who went on to serve as a Jackson County judge, and Reform Party candidate Barbara Dale Washer.
Attempts to reach Fondren for comment were unsuccessful.
Financially, the electoral contest is not close. Chaney reported $402,834 cash on hand as of Sept. 30, according to the most recent campaign finance records. Fondren, 79, had just $1,200 from a total of just $5,582 raised for the campaign, which is self-funded with the exception of a $500 donation from the Jackson County Democratic Executive Committee. Washer reported $200 total, with zero cash on hand.
On health care, Chaney is simultaneously directing the formation of infrastructure for a private insurance exchange while preparing to comply with federal mandates should the reform law survive legal challenges. Mississippi is one of 27 states suing to overturn the Affordable Care Act.
"We hope to have a health insurance exchange that would be a free enterprise, privately operated exchange with no state dollars involved in it," Chaney said.
Chaney has taken a leading role in states' efforts to implement the Nonadmitted and Reinsurance Reform Act, a part of Dodd-Frank that sought to establish a uniform, national standard for regulating surplus lines. Fifteen months after passage, the National Association of Insurance Commissioners and the National Conference of Insurance Legislators have backed rival arrangements for allocating taxes and some states have still not fully implemented the law.
Chaney said he hopes to use his role as chairman of the NAIC-backed Nonadmitted Insurance Multi-State Agreement to find common ground. "We're all in a quandary over how to accomplish uniformity just on surplus lines," he said.
Closer to home, Chaney said he is proud of a record that includes modernizing the office with new information technology, joining the Interstate Insurance Product Regulation Commission, launching a hurricane mitigation study and recruiting more insurers to the state. Under his watch, he said, the Mississippi Insurance Department has collected $11 million in fines "rebated straight back to the consumers" from overcharges by insurance companies. The state has also recouped more than $155 million related to the Martin Frankel frauds.
"We've done a lot of things to move Mississippi forward," Chaney said.
Fondren, an attorney and one-time insurance adjuster, has called for greater transparency in insurance department operations. In a campaign stop captured on WJTV-NewsChannel 12 online video, he pledged to be a policyholders' insurance commissioner, but "a regulator, not a terminator" of insurance companies.