The Commissioners

In Granite State, part of the job is retaining companies and jobs

The New Hampshire Insurance Department was the first in the nation when it was created in 1851 with a mission to administer the state’s insurance laws. Roger Sevigny, current commissioner, was recently elected an officer in the National Association of Insurance Commissioners, marking the first time in nearly 50 years that New Hampshire has been represented in the ranks of NAIC’s leadership. Sevigny was chosen by his peers to fill a vacancy in the NAIC’s officer slate created by the exit of New Mexico’s Eric Serna.

“I look forward to a year of challenges and excitement for the NAIC. I intend to work hard to further the NAIC’s goals and toward ensuring the states continue to regulate the insurance industry, as they have for almost 150 years. I believe a federal bureaucracy would do little for New Hampshire insurance consumers,” Sevigny said upon his election.

In the following edited version of a video interview with Insurance Journal’s Andy Simpson — one of 15 video interviews with state regulators from across the country available in their entirety online at www.insurance

journal.com — Sevigny discusses his ascendancy within the ranks of the NAIC, flood insurance, workers’ compensation, brokerage compensation, premium taxes and other issues that have come before his department and the NAIC.

You’ve got a new title here at the NAIC?
Sevigny: Yes I do Andy. The Secretary Treasurer of the NAIC.

Does that commit you to some future obligations?
Sevigny: Yes, it does. In addition to my job as commissioner and my responsibilities for the state of New Hampshire, it commits me to doing a number of things for the NAIC at the officer level.

Does that mean that we might be talking to NAIC President Sevigny some day?
Sevigny: Well, if I’m fortunate enough to make it through the chairs within the NAIC officer ranks, yes.

What issues at the NAIC have you been involved in?
Sevigny: I’ve been involved in the reinsurance collateralization issue. I just left the health insurance and managed care committee, where they’re holding a public hearing this morning. I’m going to be involved with, in just a couple of minutes, the international relations committee and then this afternoon in the governmental affairs task force and speed to market. I’m chair of the SERF board of directors and I could go on — a lot of things.

Back home in New Hampshire, some of your residents faced some severe spring floods and spent weeks and longer mopping up and trying to recover. What involvement has your department had in helping them with that recovery and what are your views on the federal flood insurance program and whether it’s doing the job?
Sevigny: Even though we don’t regulate flood insurance, as you know, we’ve put ourselves out as a resource for consumers. I’ve been on Channel 9 in Manchester that was broadcast throughout the state. I was on New Hampshire public radio and New Hampshire public television. I’ve been in the newspaper simply saying, “Look folks, we know about flood insurance and that sort of thing and maybe we can help you get some assistance, even though we don’t regulate the product.”

Is there something that can be done to increase the participation of New Hampshire residents in the program?
Sevigny: I think that we have to continue to make them more aware. What I’ve seen since last fall is an even greater awareness with our agents in the importance of offering flood insurance. In order to facilitate that even more, I am touring the state with the Big “I” and …[will] meet with agents in different venues throughout the state to talk about matters and one of those matters is going to be flood insurance.

You mention the Big “I,” the Independent Insurance Agents of New Hampshire and I wonder what role you see independent agents playing? Do you work closely with the independent agents of the Big “I”and PIA in your state and are there particular issues that you have been able to accomplish with their help?
Sevigny: I work very closely with them and I really appreciate the agents. The issues that they have been able to help me with — and they help me with all the time — is that they are really my eyes and ears on the ground. They are the folks dealing with consumers; they are the folks dealing with companies. They know the issues. They know the problems and I meet with them regularly to pick their brains, so to speak.

We were speaking earlier and you mentioned looking into the workers’ comp program, just taking a broad view of that and seeing if there are ways to improve that. What are you looking for?
Sevigny: When I was at a PIA function … they brought to my attention some issues that they have with the assigned risk program, the way it works, and some of the inner workings of it with regard to direct assignment carriers versus the servicing carriers and so forth. I’ve invited them in and they’re coming in … to talk about that matter specifically to see if there’s something we should do to change it.

I know you have a view on the brokerage compensation and disclosure issue. I think I’ve heard you mention that your department hasn’t received any complaints. Does that mean brokerage compensation is pretty much a dead issue in New Hampshire?
Sevigny: It’s not a dead issue; it never will be. I really believe that I need to continue to watch what’s going on. But I’m happy to say that we’ve not found any local issues. We certainly have participated in some of the issues that have happened with Marsh Mac, Aon and some of those, but they have not been local issues thankfully.

This was a historic session for the Legislature in your state, at least as far as insurance companies are concerned. The Legislature decided to lower the premium tax. Is this going to be your responsibility to see that it works?
Sevigny: The legislation asks for the Insurance Commissioner and the Commissioner of the Department of Resources and Economic Development to develop an action plan for economic development. It’s really an economic development issue and it really lies in the hands of the Commissioner for Economic Development, but with my assistance in whatever way I can help.

Was this in response to a downturn, if you will, in insurance jobs or concerns over that in the state?
Sevigny: In essence, yes. It was a concern over loss of insurance jobs in the state, you’re right.

So, this is an attempt to boost that sector and see if New hampshire can attract some more insurance jobs?
Sevigny: Yes. It’s first a retention tool and secondly, a recruiting tool.

I understand that as far as the premium tax is concerned, sometimes the obvious isn’t really the biggest benefit; it’s the retaliatory part of a premium tax that actually accrues to the benefit of domestic insurers. Could you explain how that works?
Sevigny: Yes. An insurer has to pay the higher number, whether it’s in their state of the domestication or the state that they are doing business in; whatever the higher premium tax is, they have to pay. If they’re doing business and the state that has a lower than what we currently have — 2 percent — they still have to pay the 2 percent. With the premium tax being reduced they then are given a break in all of the states that are lower than 2 percent.

Have you heard from any companies?
Sevigny: I spoke with Acadia before the Legislature voted on it and they had committed to look seriously at domesticating in the state.