NU Online News Service, Aug. 13, 11:34 a.m.EDT

Theresa “Terri” Vaughan today announced her retirement,effective in February, as chief executive officer of the NationalAssociation of Insurance Commissioners.

Vaughan would be stepping down after completing her four-yearterm as the first NAIC CEO.

Vaughan says in a statement, “It is with mixed emotions that Iannounce my departure from an organization that has been part of mylife for the better part of the past two decades. I am especiallyproud of the work we've accomplished in the areas of U.S. solvencymodernization and global insurance regulation. I believe the U.S.system of state-based insurance regulation remains the strongest inthe world—and the ongoing work by regulators is improving theframework every day.”

Diane Koken, who was Pennsylvania's longest-serving insurancecommissioner before stepping down in 2007, is expected to be namedto succeed her, although the NAIC says its officers will conduct anational search later this year to find Vaughan's replacement.

NAIC spokespeople were not immediately available forcomment.

Koken's appointment may occur in the same week as the TreasuryDepartment could unveil its long-delayed report on how stateinsurance regulation should be reformed and modernized.

Multiple sources have told National Underwriter thatthey anticipate the Treasury Department will unveil thelong-awaited report this week. The report was mandated by theDodd-Frank financial (DFA) services reform law, and was supposed tobe released in January.

Koken was the face of the NAIC as president in 2005 when Reps.Mike Oxley, R-Ohio, chairman, and Richard Baker, R- La., thechairman and head of the key Capital Markets Subcommittee of theHouse Financial Services Committee, proposed legislation dealingwith these same issues.

The bill was called the State Modernization and RegulatoryTransparency Act. A number of hearings were held on thelegislation, and there was much debate both inside and outside ofCongress on the bill. The bill was never formally introduced, anddied when Democrats took control of the Congress in late 2006. BothOxley and Baker left Congress before the Obama administration tookcontrol in 2009.

Vaughan headed the NAIC during a period when the insuranceindustry endured the fallout from the mortgage housing bubble ingeneral and the takeover of the nearly-insolvent AmericanInternational Group.

The crisis led to the passage of two landmark pieces oflegislation, the-DFA and the Patient Protection and Affordable CareAct, both passed by Congress in 2010.

Both call for a strong federal voice in oversight of insuranceactivities. States have dominated insurance regulation since thecountry was formed, and this role was made specific in two priorpieces of legislation, the McCarran-Ferguson Act of 1945, and theGramm-Leach-Bliley Act of 1999.

Vaughan split her time running the NAIC between the Washingtonand Kansas City offices.

She also travels overseas extensively as part of her NAICwork.

She served under both Republican and Democratic administrationsas the longest-serving insurance commissioner in Iowa's history.She also served as NAIC president in 2002.