By John Hilton
November 1, 2018
Tuesday’s midterm
Election Day is filled with fascinating races coast to coast – from the Florida
gubernatorial contest to the Texas Senate race, with control of Congress
hanging in the balance.
Not as many people
are paying attention to the expected turnover among state insurance
commissioners.
But some big states
are expected to seat new insurance commissioners who could have a major impact
on the industry, said Carolyn Coda, deputy head of Americas Regulatory Affairs
at Swiss Re.
The over/under on
new insurance commissioners is 19, added Coda, speaking Monday at the LIMRA
Annual Conference in New York City.
"As an
industry we'll have to get back in there and redo that education (for new
commissioners),” she said. “I think there has been a trend that as D.C. becomes
more and more dysfunctional, the states are picking up more” of the regulatory
burden.
'Absolutely
No Idea'
Most insurance
commissioners are lawyers who know little about the industry, agreed Sheryl
Moore, president and CEO of Moore Market Intelligence. It is especially
problematic for insurance and annuity sellers.
“Typically, when I
talk to these folks, not only do they have absolutely no idea how life
insurance or annuities work, much less how they are sold, but they don’t know
the difference between the different types of products: fixed, indexed or
variable,” Moore said.
It isn’t just the
sheer numbers of expected new insurance commissioners, but the significant
states where that turnover is expected. California, for example, will elect a
new insurance commissioner after eight years of the high-profile stewardship of
David Jones.
California is one
of 11 states whose voters directly elect its insurance commissioner, according
to the National Association of Insurance Commissioners. Of the 39 states in
which the insurance commissioner is appointed, 37 give the power of appointment
to the governor; in New Mexico and Virginia, the insurance commissioner is
appointed by a commission.
Jones is
term-limited and will be succeeded by either Democratic state Sen. Ricardo Lara
or Steve Poizner, a lifelong Republican and former insurance commissioner who
listed “no party preference.”
Under Jones’
leadership, the insurance office was highly consumer focused. During the
development of the Affordable Care Act exchange, he worked to exclude Anthem
Blue Cross and Blue Cross of California from the exchange, citing their high
rates.
Jones later went
after other insurers, such as Blue Shield of California and United Healthcare,
claiming they were charging high rates. United Healthcare subsequently withdrew
from the state market entirely, while Blue Shield remains.
Similar
To Jones
In one of his final
meetings of the NAIC, an August meeting in Boston, Jones expressed support for
a New York push to include life insurance in a best-interest model law for
annuities.
Lara would likely
pick up Jones’ positions. One of the more liberal members of the California
Senate, he co-authored a bill last year to create a state single-payer,
universal healthcare plan that would have cost around $400 billion annually.
After passing the Senate, it was shelved in the Assembly.
Poizner drew praise
for his management of the insurance department from 2007-2011. He streamlined
and modernized the office while slashing its budget. The department reported
nearly 2,800 fraud arrests, a record number. Poizner, who made millions as a
technology entrepreneur, ran for governor in 2010 and was defeated in the GOP
primary by Meg Whitman.
States likely to
have newly-appointed insurance commissioners include a pair of important ones
to financial services: Connecticut and Florida. In both states, incumbent
governors Daniel Malloy, D-Conn., and Rick Scott, R-Fla., are not running for
re-election.
InsuranceNewsNet Senior Editor John Hilton has covered business
and other beats in more than 20 years of daily journalism. John may be reached
at john.hilton@innfeedback.com.
Follow him on Twitter @INNJohnH.
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