An important piece of your life is about to be determined by a brand new state committee that has received very little attention so far.<\/p>\n
The Insurance Nominating Committee was created by legislation to appoint the Superintendent of Insurance, who will head a department which, as of July 1, will no longer be a division of the Public Regulation Commission; hallelujah.\u00a0\u00a0 Every one of us, every which way you look, is a captive customer of the insurance industry, and therefore of \u00a0regulations written and decisions made by this department.\u00a0 Let\u2019s hope this committee gives us an honorable and committed superintendent, as free of political influence as it\u2019s possible to be in our system.<\/p>\n
The change was partly the brainchild of an influential think tank called Think New Mexico, which now writes on its web site that the office \u201cbalances the interests of insurance businesses and consumers and insulates insurance regulation from political interference.\u201d<\/p>\n
Is it possible to use the political system to create an office that will be free of politics?\u00a0 In New Mexico?\u00a0 The legislation attempts to do that.\u00a0 Four members of the nine-member committee are appointed by the Governor; four by the Legislature\u2019s leadership committee, the Legislative Council; the political parties must be balanced; the ninth member must be chosen by agreement of the eight.\u00a0 Half of the eight appointees must be from the insurance industry and the other half must represent consumers.\u00a0 As the legislation reads, the committee is supposed to appoint a superintendent and then disappear until the job becomes vacant again.<\/p>\n
The Governor\u2019s office and the Legislative Council recently announced their appointments to the panel.\u00a0 Now the work starts.<\/p>\n
The law says the superintendent, once appointed, can be fired only for\u00a0 \u201cincompetence, willful neglect of duty or malfeasance in office\u201d \u2013 and only by the committee. \u00a0Superficially, that looks pretty good.\u00a0 It creates a buffer between the Superintendent and both the Governor and the legislative leadership.\u00a0 We hope that means that neither the Governor nor the legislative leadership can exert undue pressure.<\/p>\n
We are not concerned only with the current governor or this legislative leadership.\u00a0 A new structure has been created.\u00a0 The incoming superintendent\u2019s term will expire at the end of 2015; after that, the law establishes four-year terms.\u00a0 The committee\u2019s first term ends on June 30, 2015; a new committee will have to be named after the 2014 election, to appoint a new superintendent or reappoint one.\u00a0 All kinds of political dynamics are possible.<\/p>\n
The temptations to jigger with insurance regulation are manifold.\u00a0 We\u2019ve heard about some improprieties, and more have been rumored in political circles.\u00a0 Years ago I heard a story from a friend in the industry \u2013 unproven but credible \u2013 about pressure applied to an insurance company by a department employee to pay a possibly bogus claim for a politically connected individual.\u00a0 I emphasize that the story is old and the employee who allegedly did this is long gone.\u00a0 It\u2019s not hard to imagine similar pressures, not only for claims but for rulings about rates.\u00a0 Big dollars are involved \u2013 your dollars and mine.\u00a0 Honorable public servants at every level resist such temptations every day.<\/p>\n
New Mexico needs an insurance superintendent who understands the industry but is not in its pocket.\u00a0 We need a superintendent who will go after bad guys, no matter which side of the system they\u2019re on \u2013 insurance companies, agents, adjusters, lawyers, and \u2013 yes \u2013 consumers; and who knows how to split the difference in approving rates and setting regulatory policies\u00a0 \u2013 reasonable for the insurance companies, fair and understandable for consumers.\u00a0 This is not an unrealistic ideal; though the details are specific to this industry, it\u2019s the level of excellence New Mexicans have the right to expect of every department head.<\/p>\n
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An important piece of your life is about to be determined by a brand new state committee that has received very little attention so far. The Insurance Nominating Committee was created by legislation to appoint the Superintendent of Insurance, who … Continue reading