Changing of the Guard

It’s a remarkable coincidence that several state regulators in the Northeast seem to be moving on to greener pastures just as key reform efforts are winding into place.

This past month, Massachusetts Insurance Commissioner Nonnie Burnes abruptly announced she would step down from that role in order to pursue a teaching fellowship at Northeastern University in Boston.

This happened, of course, within a day of New York’s Senate having confirmed the Empire State’s newest superintendent, James Wrynn. Wrynn had been serving on an interim basis since August, having replaced Eric Dinallo, who for the last year had been perhaps the most-watched insurance commissioner in recent memory, due largely to his handling of the collapse of AIG and the turmoil in the insurance and financial markets generally.

To agents, there is an unusual and interesting parallel between these regulators’ resignations: Both occurred just as key battles over how agents run their businesses were about to unfold.

Burnes’ resignation came just as legal proceedings – brought by The Massachusetts Association of Insurance Agents (MAIA) – were heating up over her decision to end agents’ ownership rights of some expiring auto insurance policies. Agents had been fighting the decision tooth and nail; their lawsuit, which would have major ramifications for all agents in the state, is headed to court next month.

In New York, agents across the state are tensely following a major proposal that would mandate disclosure to clients of how much agents get paid for a particular policy. That measure, which dates back to the major settlements with carriers and brokers over contingent commissions, was spearheaded under Dinallo’s tenure.

Could the changing of the guard have an impact on agents? It seems unlikely, but it certainly throws a wrench in the works for regulatory bodies when their leadership changes.

In New York, the so-called transparency proposal is now its third iteration, having been watered down slightly from previous versions – oral disclosures are now permitted, for instance – and agents’ groups have been working hard to further lobby for more agent-friendly practices. Whether the newly installed Wrynn agrees with them will give agents a good sense of how closely or antagonistically the new superintendent will work with them in the coming year.

As for Massachusetts, there is no reason to assume any change in Burnes’ policy is forthcoming. Frank Mancini, head of the MAIA, said her resignation took the group by surprise, but he expects the current course will remain largely the same for the department.

Speaking of commissioner resignations that caught the industry off guard, D.C. also has a new commissioner, after Thomas Hampton abruptly left the department on Aug. 28. No reason has been given for his departure, although some local politicians have publicly rebuked Mayor Adrian Fenty for his failure to explain why Hampton left and whether he was fired.

Adding to the puzzling circumstances: Fenty appointed Gennet Purcell – a friend of his wife – to replace Hampton.

It seems as though D.C. agents can continue to count on at least one thing: It’s still politics as usual in our nation’s capital.