“Many people consider the job an audition for a better-paying job,” observed Sally McCarty, a former Indiana insurance commissioner and retired consumer advocate, referring to the post of insurance commissioner and the all too common graduation of former regulators to the insurance industry.
An investigation by the Center for Public Integrity (CPI) affirms this trend. According to data, half of the 109 state insurance commissioners who have left their position in the past decade went on to work for the industry they used to regulate. Many left before their term expired, while only two moved to consumer advocacy.
Consumer advocates and some commissioners say the close relationship between regulators and the industry diminishes the consumers’ say in matters relating to rate increases, regulations and investigations of irregularities. These cozy relationships are further reinforced by campaign contributions, posh meals, and the possibility of future employment, the report said.
Still, insurers say they resort to such tactics because the industry is highly regulated and they need lobby efforts to inform commissioners and other policy makers, especially since they are in a position to influence the lives of millions of Americans.
“It is crucial for commissioners and other state and federal policymakers to understand the products and services we provide to people,” Jack Dolan, a spokesman for the American Council of Life Insurers, explained.
The post remains a powerful and tricky one that requires a balancing act on the part of the insurance commissioner. Their primary mandate is to protect consumers by reviewing rate changes, investigating complaints, and ensuring that insurers can cover claims.
Emails obtained by CPI reveal personal relationships between regulators and insurers and their representatives, with the exchange of dinner invitations, family news, and even sports wagers.
“It’s very difficult at time to take a stand for consumers and have your voice heard. A lot of commissioners don’t bother doing that for that reason—and they don’t want to alienate the industry,” McCarty observed.
