State Health Insurance Regulators Tied To Industry, Says Watchdog

Published on

Vote to determine health insurance rates could be affected by lobbyists, industry insiders

Consumer Watchdog, the nonpartisan consumer advocacy agency, on Tuesday warned that close ties to the insurance industry through lobbying, contributions, and appointments could affect an upcoming vote on Sunday by the National Association of Insurance Commissioners (NAIC) concerning the rates people pay for health insurance.

According to Consumer Watchdog’s data, 24 state insurance commissioners worked for the insurance industry before they were appointed to their present posts, and two were elected with the assistance of campaign contributions from the industry. Six past presidents, the group also found, left NAIC since 2000 to work in the industry as lobbyists and as consultants.

The group called for a number of actions to level the playing field: a ban by NAIC on commissioners lobbying former colleagues once they leave their posts; a prohibition on taking a job within the insurance industry for at least a year when they depart NAIC; for governors to reconsider appointments of insurance industry insiders as state insurance commissioners; and for states to prohibit insurance industry campaign contributions to candidates for the post of insurance commissioner.

Carmen Balber, Washington director for Consumer Watchdog, said in a statement, "The insurance commissioner holds the state's top consumer protection job, with enormous impact on the price of consumers' health insurance. Commissioners shouldn't be regulating former employers or campaign supporters." Balber added, "With the National Association of Insurance Commissioners becoming such a prominent voice in health reform implementation, it's critical that we close the revolving door between the insurance industry and regulators."

New Republican governors actively fighting health care reform appointed three commissioners with industry ties, says the group: David Black, president and CEO of Liberty Life, S.C.; Ted Nickel, director of governmental and regulatory affairs at Church Mutual Insurance Co., Wisc.; and Michael Consedine, partner and vice chairman of law firm Saul Ewing’s Insurance Practice Group, Pa. Consumer Watchdog also points out that Sandy Praeger, Kansas commissioner, and Ralph Hudgens, Georgia commissioner, named the insurance industry as their top campaign contributors, according to the National Institute on Money in State Politics; Praeger to the tune of $208,792, and Hudgens for $149,402.

The commissioners will meet in Austin, Texas, on Sunday to decide whether to support legislation that will increase health insurance premiums. The proposed legislation also removes sales commissions from insurers' administrative costs, thereby increasing the cap on administrative expenses and profits known as the "medical loss ratio" contained in the federal Affordable Care Act.

Other issues to be considered affect state exchanges; a broker-proposed rule that only licensed individuals such as brokers may help people go through state exchanges; additional amendments concerning the medical loss ratio; and proposed rulemaking for rate review programs.

Latest Videos

Latest Releases

In The News

Latest Report

Support Consumer Watchdog

Subscribe to our newsletter

To be updated with all the latest news, press releases and special reports.

More Releases