Hawaii Insurance Commissioner Schmidt Resigns

The latest in a series of resignations among western insurance regulators, J.P. Schmidt, Insurance Commissioner of the State of Hawaii, will be leaving his position to join the Honolulu law firm of Bays Deaver Lung Rose Holma, effective July 1.

Schmidt will be practicing general business, corporate and government regulatory law with a concentration in insurance, health and captive insurance matters. Bays Deaver Lung Rose Holma concentrates in business and real estate transactions and litigation.

Although it may be a coincidence that several commissioners are leaving their posts, in the past few months Neal T. Gooch was appointed Commissioner of the Utah Insurance Department, replacing Kent Michie who retired in January; the New Mexico Public Regulation Commission appointed Craig Dunbar new interim insurance superintendent, following the resignation of Deputy Insurance Superintendent Thomas Rushton, who had been serving as interim superintendent after state insurance superintendent Morris Chavez resigned in May over backlash that stemmed from a contentious health insurance rate case; and Nevada Insurance Commissioner Scott J. Kipper resigned on June 2.

Additionally, California Insurance Commissioner Steve Poizner will be replaced by either Dave Jones or Brian Fitzgerald following the November 2010 General Election. Poizner decided not to run for re-election as insurance commissioner, but instead had an unsuccessful run for the Republican ticket for Governor. He was defeated by Meg Whitman in the June primary.

“It’s simply been a coincidence, and there are different reasons why commissioners in the western states are leaving around this time,” Hawaii’s Schmidt said.

In his case, Schmidt said he believed it was an appropriate time for him to return to the private sector because he has served longer than any prior state insurance commissioner, after being appointed to the role in February 2003. In Hawaii the average term for insurance commissioners is two and a half years. Moreover, the governor of Hawaii Linda Lingle is being termed out of office, so her successor is likely to want to appoint a new commissioner at that point.

“This seemed like a good time because I have been able to accomplish a number of good things for the state of Hawaii and work with people in the Insurance Division on my philosophy on approaching insurance regulation,” Schmidt said. “My philosophy, which I have seen work very well and I hope has been drilled down the ranks of the Insurance Division so that it will continue, is that things work much better if you have open communication and discussion. There will be inevitable disagreements because of the complexity of insurance. But too often, regulators get into an adversarial position, and that’s bad for the industry, for the regulator and ultimately bad for consumers, because it results in game playing.”

As Hawaii Commissioner, Schmidt has been successful analyzing the implementation of the new Federal Health Reform Law in conjunction with Hawaii’s Prepaid Health Care Act. He also helped stabilize and grow the insurance industry, reign in workers’ compensation premiums more than 60 percent over the next five years, and create a hospitable captive environment. Schmidt helped bring in Summerlin Health and Life and numerous new hurricane insurers to the market to provide more competition. Auto and homeowners markets have been competitive with premiums coming down in the last few years. And Dongbu, one of South Korea’s largest property and casualty insurers, came to Hawaii under the Port of Entry Law that Schmidt promoted.

Schmidt’s replacement has not yet been named, although he said he was confident Deputy Insurance Commissioner Gordon Ito would “keep things humming along.”