News Currents

Newly elected Democratic governors in Massachusetts, New York and Maryland are expected to name their own insurance commissioners, although it’s to early to know who the successors might be, according to insurance industry insiders.

The industry will see many new faces in the halls of state houses as a result of Democratic gains. Across the country, Democrats now control a majority of the governors’ seats as well as 23 state legislatures, more than they have held since 1994.

“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.

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

Spitzer and Mills
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 front-runner at this time,” according to Kristina Baldwin, who represents the Property Casualty Insurers Association of America in the state.

Spitzer’s signals
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,” contends PCI’s Baldwin.

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 to name a commissioner, Mancini said it would be “refreshing” if the appointee had some insurance background.

Patrick transition
Meanwhile, Patrick has named Michael Angelini, a lawyer who is chairman of Hanover Insurance Co, in Worcester, Mass., to his transition team, which has been charged with recruiting talent for the new administration.

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 from the fact that Coakley’s father was part owner of a western Massachusetts independent insurance agency.

Blue Marland
In 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’re going to listen to different points of view in a Maryland where compromise is not a dirty word but an American value,” he said.

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

Democratic governors in Maine — John Baldacci — and in Pennsylvania — Ed Rendell –were reelected, while Republican governors in Rhode Island, Vermont and Connecticut managed to buck the Democratic trend and keep their seats.

In Pennsylvania, Gov. Rendell does not yet know if he will be dealing with a Republican-controlled House and Senate, or a split legislature. Republicans retained their majority in the Senate (29-21), however the final tally on three too-close-to-call House seats could decide whether Democrats or Republicans control the House by a slim margin. According to IAB’s Leyden, 25 percent of state lawmakers are “new faces.”

In the state of Connecticut, popular incumbent Republican Gov. Jodi Rell handily beat Democrat John DeStefano Jr. The state’s insurance commissioner serves at the pleasure of the governor and, although some Democrats have called for Rell to replace the current commissioner, Susan Cogswell, Rell has given no indication she is taking the Democrats’ advice. Rell kept Cogswell after she took over the corner office from former Gov. John Rowland, who resigned.

Other than Rell, Republicans did not fare well in Connecticut. Democrats gained a veto-proof majority in both the House (106 of 151 seats) and Senate (24 of 36 seats). Also, one of Cogswell’s and the insurance industry’s toughest critics, Democrat Attorney General Richard Blumenthal, was reelected.

New Hampshire history
One of the most surprising shifts to the Democrats occurred in New Hampshire, where incumbent Democratic Gov. John Lynch won in a landslide. Democrats also won more than 80 seats to grab a majority in the 400-member House and they picked up five Senate seats, giving them 13 of 24 there. It’s been 80 years since Democrats last owned the House. They last controlled the Senate in 1988.

While the new politics may challenge the industry, this may not be bad. “Elections can inject a new level of energy” into the debates over public policy, noted NAMIC’s Tetrault. “It’s an opportunity to build new relationships.”