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 [email protected]. Follow him on Twitter @INNJohnH.
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