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N.M. Insurance Chief Suspended For Dec. 24 Early Dismissal

By Winthrop Quigley and Michael Hartranft, Albuquerque Journal, N.M.
McClatchy-Tribune Information Services

Jan. 18--The state's chief insurance regulator, John Franchini, has been given a 10-day unpaid suspension for missing a meeting with his soonto-be ex-boss and for letting his employees leave work an hour early on Christmas Eve, his attorney says.

"We don't believe the charges are in any way justified," said attorney Paul Kennedy. "I stand ready to vigorously defend the superintendent against these political attacks."

Public Regulation Commission chief of staff Johnny Montoya, who will serve as interim superintendent, wouldn't say why Franchini was suspended, because it is a personnel matter.

Franchini referred questions to Kennedy, who told the Journal the official reason for the suspension was that Franchini let employees leave work an hour early on Christmas Eve and that he missed a meeting with Montoya.

Three other people familiar with the situation told the Journal that Franchini angered some commissioners by discussing the Insurance Division's fiscal 2014 budget with members of Gov. Susana Martinez's administration.

Sen. Carroll Leavell, R-Jal, who operates an insurance agency in southeastern New Mexico, also said politics was at work, as has been the case since the division became part of the PRC in 1999.

Leavell said Franchini met with Gov. Susana Martinez's budget staff twice at the administration's request to discuss the division's funding needs, beginning July 1, when it will no longer be part of the PRC -- and the insurance superintendent will no longer answer to commissioners or to Montoya.

PRC Chairman Ben Hall said Thursday the budget discussions had nothing to do with what he called a disciplinary action against Franchini. He declined to comment further.

State law gives the PRC the power to hire and fire the superintendent but no authority to regulate the insurance industry. Every insurance superintendent until Franchini has either been fired or forced to resign.

On July 1, the Insurance Division, pursuant to a constitutional amendment approved by voters in November, will be removed from the PRC.

Montoya said the superintendent was notified of his suspension late Friday afternoon last week.

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"It is a personnel matter, and what I will confirm is that he is on suspension, and as has been the practice of the PRC, we will not comment any further," Montoya said.

Hall said he understood the suspension was for 10 days and that Franchini would not be paid for that time. He said the suspension as a "disciplinary action and we felt like it was necessary."

Commissioner Pat Lyons referred questions to Montoya.

The Legislature during the session that started Tuesday is expected to consider bills to implement the new constitutional requirement, including a bipartisan bill Leavell is cosponsoring. Leavell said Thursday the bill is designed to "take most of the political pressure off of the (division) so it can operate in an atmosphere where the superintendent is not fearful of retaliation."

"That department operates under heavy political influence," Leavell said. "I'm looking forward to having that department moved out from under the PRC."

Kennedy said Franchini let his staff leave early on Christmas Eve because snow was degrading driving conditions on the roads to Espanola and Albuquerque and that he and two of his senior staff remained in the office to field phone calls for the last hour of the workday.

As for the meeting with Montoya that Franchini missed, Kennedy said Montoya knew Franchini would be on vacation that day.

The commission hired Franchini in July 2010 to succeed Morris Chavez, who resigned under pressure in May of that year. He earns $100,000 a year.


(c)2013 the Albuquerque Journal (Albuquerque, N.M.)

Visit the Albuquerque Journal (Albuquerque, N.M.) at

Distributed by MCT Information Services

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