Risky Business, Regulator At Work In Baghdad

By Daniel Hays

NU Online News Service, June 11, 2:48 p.m.EDT?Unperturbed by views of bomb rubble and a blast thatmissed him by minutes last month, Mike Pickens is upbeat andoptimistic as he labors to reconstruct the insurance industry inwar- torn Iraq.[@@]

The insurance market prospect for the country, which has apopulation of 26 million, is one with "a lot of potential," saidMr. Pickens, who is maintaining electronic links to his post asArkansas insurance commissioner while working as an advisor inIraq.

He is serving as an independent contractor for Bearing Point,the McLean Va.-based firm (formerly KPMG consulting), which lastJuly secured a $79.5 million Iraq economic rehabilitation contractfrom the United States Agency for International Development.

Communicating with a reporter via a wavering cell-phoneconnection and e-mail, Mr. Pickens said that when he arrived for anunexpected assignment that began in early March, he was surprisedat "the level of sophistication in the market and wide variety ofproducts."

His work has involved creating a draft insurance law thatcomplies with international best practices and generating suggestedregulations to accompany the law. Training for regulators andIraqis involved with the industry is also part of his agenda.

Mr. Pickens said he can't discuss wearing a flak jacket or othersecurity precautions, but he has "always felt very safe" whileworking in Baghdad--this despite a close call May 6.

On that day, he went through security and crossed the July 14Bridge to his office at the Coalition Provisional Authority. Fourminutes later, a suicide car bomber roared into the same checkpointand set off an explosion killing one soldier and five Iraqis.

The blast blew out the back windows in his residence less than amile away as well as a window at his office. The slain GI, who hadjust checked his I.D., was an Arkansas native. The event left Mr.Pickens distraught, "It bothers you to lose one from home," hesaid.

Mr. Pickens mentioned his concern that U.S. national newsprograms focus on the violence and fail to show "a lot of good workgoing on here."

The Iraqis he works with on the industry project, he said, areknowledgeable, cooperative and hopeful--"looking forward to a muchbrighter future."

He meets weekly with the general managers of the nation's seveninsurers. Iraq's insurance marketplace, he explained, has threegovernment-owned insurance companies and four private carriers.Reinsurance must be purchased through the government carrier.

The commissioner said mandatory auto liability coverage is agovernment program funded by a gasoline tax.

The country had a good insurance market through the 1970's whenit was hurt by sanctions following the first Gulf War. Productsbesides motor insurance include key man life insurance, homeowners,commercial insurance and engineering insurance. The last is acombination of coverages providing protection against plantfacility risks, machinery equipment or contract works. It may alsoinclude professional liability, general liability and other packagecoverage.

Marine underwriting is also big, he said. Private insurers havebeen able to write business since 1998 when Iraq passed a law tothat effect. At this point they primarily write life business, butmay be authorized tow rite some p-c as well, he said.

Recently, the statute he worked to develop was endorsed by theoutgoing finance minister and has been sent to the CoalitionProvisional Authority but action on insurance matters has taken aback seat during the formation of a new government. The measure ispresently being translated into Arabic, he said.

Mr. Pickens commented he could not say what kind of insurancesales and market volume exists in Iraq because he has not done anyanalysis of the market.

During his tour, Mr. Pickens found time to visit the remains ofSaddam Hussein's bombed out nuclear bunker, but 12-plus-hour days,six or seven days a week, have been the norm. Being away from hiswife and two young children is hard, he said.

He has been heartened by hundreds of Iraqi youngsters he seespeddling small items and hanging out with GIs. "The kids loveeverything American and Western," he related.

Mr. Pickens is looking forward to a seminar program set for theend of the month in Amman, Jordan that will bring Iraqis togetherwith their foreign counterparts in the insurance industry.

According to USAID, Bearing Point lists as its future plans: theimplementation of the insurance law in its final form, developingan insurance regulatory agency and creating an Iraqi ReinsuranceAssociation.

Mr. Pickens said he thought the Iraq insurance market has goodchance of success because the nations involved with the Coalitionwant to see an open economy.

"The Iraqis have a hopeful future," he predicted.