Industry Expects New Commissioners in Mass., Md., N.Y.

Newly-elected Democratic governors in Massachusetts, New York and Maryland are expected to name their own insurance commissioners, although the identity of any successors is unknown at this time, according to insurance industry insiders.

Industry representatives are optimistic that the new appointees will be officials with whom they can work.

“It’s definitely a change in the dynamics,” said Paul Tetrault, regional representative for the National Association of Mutual Insurance Companies, of the Democratic victories in state Legislatures as well as governors’ offices.

In New York, Eliot Spitzer won in a landslide over Republican John Faso to succeed Gov. George Pataki. Spitzer is expected to replace Pataki-appointee Superintendent of Insurance Howard Mills, as well as a number of top staff at the insurance department.

“The incoming governor has a reputation for bringing in top notch people,” said Ellen Kiehl, assistant executive director for the Professional Insurance Agents of New York, adding that during his campaign Spitzer indicated that economic development would be a priority for him if elected.

Exactly who Spitzer has in mind to succeed Mills is not known. “There’s no clear frontrunner at this time,” according to Kristina Baldwin, who represents the Property Casualty Insurers Association of America in the state.

Kiehl and others in the industry are encouraged by signals from Spitzer’s campaign that workers’ compensation would be a major priority for him. She noted that he has made it a point to meet with both business and labor groups, whose cooperation will be necessary to find a workers’ compensation solution. “That’s really good news because workers’ comp is an ongoing drag on our state’s economy,” Kiehl added.

Gov. Pataki achieved some workers’ compensation reforms in his first term and tried again within the last year but came up short.

“Maybe he can move it further than the Pataki administration,” offered Tetrault.

Just as they watched as Attorney General Spitzer went after the insurance industry with investigations of top brokers over bid rigging and compensation, some in the industry will be keeping an eye on his newly-elected successor in that post, Andrew Cuomo.

“He likely has political aspirations so we may have another high-profile activist attorney general,” suggests PCI’s Baldwin.

Maryland
Massachusetts Insurance Commissioner Julianne Bowler is likely to be replaced by incoming Democratic Gov. Deval Patrick but nobody yet knows that for certain or by whom.

Governor-elect Patrick is largely an unknown quantity to the industry. But industry representatives said they see the former corporate and civil rights attorney as an open-minded, policy-oriented leader and they anticipate that his appointee for insurance commissioner will be also.

Frank Mancini doubts Patrick has thought all that much about who should run the insurance department. “With all of the issues his administration faces, I don’t see insurance on the top of his list,” contends Mancini, who is president and chief executive officer of the Massachusetts Association of Insurance Agents.

When the time comes, Mancini said it would be “refreshing” if the appointee had some insurance background.

The industry in Massachusetts also does not yet know how involved in insurance the incoming attorney general, Martha Coakley, intends to be. The attorney general she is succeeding, Tom Reilly, was very involved in auto and home insurance rates cases and investigations.

Agents might take some encouragement in the fact that Coakley’s father was part owner of a western Massachusetts independent insurance agency.

Maryland
Democrat Martin O’Malley denied Republican Gov. Robert Ehrlich a second term in Maryland and upset Republican hopes of making inroads into Democratic control.

The term of Maryland Insurance Commissioner R. Steven Orr actually runs until June, 2007. However, according to industry lobbyists, Orr has said he would step down several months before that in the event Ehrlich was not re-elected, freeing the way for O’Malley to name his own person to the post.

“He (Orr) has said he does not intend to stay on and would probably leave in February,” said Don Cleasby, regional manager for the Property Casualty Insurers Association of America.

Tom Lyden, vice president for advocacy for Insurance Agents & Brokers, which represents member agencies in Pennsylvania, Maryland and Delaware, says it is too early to know who might take Orr’s place or even what approach O’Malley might take on insurance issues since they were not discussed much during the campaign.

“Gov. Ehrlich was a strong friend of independent agents but despite that we are ready to work with Gov. O’Malley and feel he’s a reasonable person,” Lyden added.

O’Malley has promised to put together an administration with “a name synonymous with progress, with fairness, with opportunity, with integrity.”

“We are going to make the government work for you,” he said. “We’re going to listen to different points of view in a Maryland where compromise is not a dirty word but an American value.'”

Lyden said insurance agents were pleased that more “pro-agent legislators” were elected in Maryland, including independent agent Pam Beidle in the House of Delegates.

While the new politics may challenge the industry, this may not be a bad development.

“Elections can inject a new level of energy” into the debates over public policy, notes NAMIC’s Tetrault. “It’s an opportunity to build new relationships.”

According to Leyden, this will be particularly true in Pennsylvania where, although the power did not shift all that much in the state legislature, “25 percent are new faces.”