Perspectives: So-Called Revolving Regulator/Industry Door at Rest, Not Closed
|Copyright:||(c) 2011 A.M. Best Company, Inc.|
|Source:||A.M. Best Company, Inc.|
There's something notable about the imminent departures of some top state insurance regulators: they aren't leaving to take a job in the insurance industry.
West Virginia Insurance Commissioner and 2010
Consumer activists have long decried the "revolving door" between regulatory agencies and the industries they oversee. A recent noninsurance example was
There used to be a regular job progression pattern for NAIC leaders: advance to the presidency, then join, or rejoin, the industry. From 2000 to 2007, six NAIC presidents left office and accepted positions working for or representing insurance companies, according to a report prepared by Consumer Watchdog.
"They would never miss an NAIC meeting. They'd be right back there with a mark on their badge that says 'former regulator'," said
More recent history has shown a different pattern: 2008 President
"It was certainly a step forward in the right direction," said Bridgeland, a NAIC consumer representative.
"I'm sort of an anomaly," said Praeger, who ran for and won re-election in 2010 (and was unopposed in the November election). Praeger said she feels compelled to stay on in order to oversee health care reform implementation at the NAIC; the expiration of her current term dovetails nicely with the 2014 debut of state-based health insurance exchanges. She said she feels "invested" in making a success of the NAIC's role. "I certainly wouldn't go to the other side," she said.
But Praeger defended the regulator-regulated exchange, saying her insurance department has benefitted from the "invaluable" industry experience of key staffers. If these staffers, or other commissioners, later move on to industry jobs, they can play an important role in helping employers effectively comply with insurance laws and regulations, she said: "The flow goes both ways."
Still, industry-regulator ties are too tight for some. Of the current class of 56 insurance commissioners, 24 worked for the insurance industry before taking office, according to Consumer Watchdog. The NAIC has considered official "cooling off" periods barring members from working in the industry for a time after leaving office, but commissioners have left that decision up to individual states.
Bridgeland draws a distinction between appointed regulators and those who are elected. For example. former Oklahoma Insurance Commissioner