The Republican lawsuit targets reinsurance that helps insurance companies provide universal coverage without accounting for pre-existing conditions.
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 National Association of Insurance Commissioners President Jane L. Cline recently announced she will retire at the end of June. Maine Insurance Superintendent Mila Kofman will leave May 31, with the intention of returning to academia. Illinois Insurance Director Mike McRaith is also moving on -- to lead the new Federal Insurance Office.
Consumer activists have long decried the "revolving door" between regulatory agencies and the industries they oversee. A recent noninsurance example was Federal Communications Commissioner Meredith Attwell Baker announcing her departure after less than two years on the job to take a position at Comcast -- weeks after voting to approve its merger with NBC Universal. Such moves can be unseemly, but are rarely illegal.
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 Brendan Bridgeland, director of the Center for Insurance Research.
More recent history has shown a different pattern: 2008 President Sandy Praeger and 2009 President Roger Sevigny remain in their state offices representing Kansas and New Hampshire, respectively. Cline remained a regulator for six months following her presidential tenure.
"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 Kim Holland joined the Blue Cross and Blue Shield Association as executive director of state affairs after losing her re-election race in November. There is no doubt Holland's first choice was to remain a regulator.
(By Sean P. Carr, Washington Bureau Manager: firstname.lastname@example.org)