Former Nebraska Sen. Ben Nelson has been named CEO of the National Association of Insurance (NAIC), the organization announced today in a news release.
The move was widely anticipated and welcomed by many in the industry. Nelson has reportedly already met with top lobbyists and Washington insurance officials like Federal Insurance Office Director Michael McRaith to smooth the way.
“I am honored to serve as CEO during such an important and exciting time in the regulatory community,” Nelson says in a statement. “After years in government, this is a homecoming for me. It is also an opportunity to advance the work of the NAIC to safeguard the insurance sector through the promotion of our outstanding regulatory framework. In my new role, I look forward to continuing our relationship with the Federal Insurance Office as well as working with state regulators on matters affecting the economy and consumers.”
“Senator Nelson’s impressive credentials and deep knowledge of state insurance regulation are simply unmatched,” says Jim Donelon, NAIC President and Louisiana Insurance Commissioner. “His rare and valuable combination of experience in insurance and government will be a tremendous asset to our organization. In addition to skillfully navigating the political arena, the stalwart leadership and collaborative nature that marked his time in public service will be integral to elevating our efforts on Capitol Hill. Moreover, as a former regulator and executive vice president of the NAIC, Sen. Nelson has a keen understanding of the insurance marketplace, which will make him an effective advocate for the preservation of our state-based system of regulation.”
In an interview last fall while discussing qualifications for a new CEO, Donelon said that there must be “gravitas to that position,” and it must be a person that commands respect and can articulate the association's successes to Capitol Hill and the Administration.
The NAIC announced in August that then-NAIC CEO Therese M. "Terri" Vaughan would be retiring from the NAIC, something she had been contemplating for at least a year – according to sources, but she was prevailed upon to stay on a year longer.
Many in Washington, on both sides of the aisle, interviewed over the past weeks when Nelson's name was floated around Washington have endorsed the choice already. People have called Nelson, a moderate who has served as an insurance commissioner and insurance executive, is considered a strong leader who understands the state system and who works well with others. He is both pro free market and consumer, and can represent the views required in many forums.
Nelson will face federal regulatory pressure on many fronts as well as consumer coverage issues and crises. He will also deal with issues such as availability and affordability of insurance in the face of global warming and the integration of national reforms and legislation with state regulatory system, while championing state-based regulation. Most immediately, the Dodd Frank Act and the Patient Protection and Affordable Care Act (PPACA) implementation mixed with state politics and resource issues loom large, as does flood insurance, fiscal issues and economic recovery.
Nelson, who voted for the PPACA, upset many of his more conservative colleagues and constituents in Nebraska for the controversial vote.
Prior to retiring from the Senate in 2012 after two terms, Nelson served as governor of Nebraska from 1990-1998. He also served as executive vice president and chief of staff for the NAIC from 1982 to 1985. He served as director of the Nebraska Department of Insurance in 1975. From 1977 to 1982 he was executive vice president and later president and EO of the Central National Insurance Group.
"We are pleased that the NAIC has selected such an extraordinary public servant with deep expertise in insurance, both as a regulator and as a longtime insurance professional," says David Sampson, president and CEO of the Property Casualty Insurers Association of America. "His experience as an insurance company executive, regulator and governor gives him unique qualities, experience and credibility for this position."
“[Nelson's] extensive experience is uniquely suited to make him an effective advocate for the preservation of state regulation of insurance," says Ron Van Haden, executive vice president and CEO of the National Association of Professional Insurance Agents. "PIA looks forward to continuing the close working relationship it has maintained with Ben throughout his decades of service.”
Charles Symington, senior vice president of government affairs for the Independent Insurance Agents and Brokers of America, says the IIABA “has had a long and positive relationship with both Sen. Ben Nelson and the NAIC. We congratulate Sen. Nelson on his new position and we look forward to continuing to work with Sen. Nelson in his new capacity as CEO, especially on issues such as agent licensing reform and Affordable Care Act implementation.”
Charles M. Chamness, president and CEO of the National Association of Mutual Insurance Companies, noting Nelson received two public policy awards from NAMIC, says he earned “our respect as a fair-minded leader capable of reaching his own conclusions based on what is best for all stakeholders.”
Vaughan left the association on Nov. 30 rather than the first quarter of 2013 as expected, and Andrew Beal became acting CEO for the second time. Vaughan had cited family obligations and the desire to revise a father-daughter textbook—now in its 10th edition—as reasons for leaving the post that she has held since 2009.
Beal will continue to serve as the chief operating officer and chief legal officer.
The salary of the CEO is no longer disclosed. However, in January 2008, the NAIC released pay information for top executives that stated Weatherford's salary at $370,000.
As it turns out, Nelson has another day job. The national communications and public affairs firm Agenda announced yesterday the addition of Nelson as a senior policy expert to the firm. The firm also says it formed an advisory board to support its public affairs platform to provide clients with high-level policy and political guidance, with Nelson and former North Dakota Gov. Ed Schafer hired as key advocates.
The NAIC says it does not see an issue with Nelson filling both roles. Nelson will have clients on issues such as defense, sequestration, and veterans issues, the NAIC says. A question was raised on how he will advise on any insurance, market finance, health or international trade issues if they arise among his clients.
Agenda says it wants him for roughly the same reasons he stood out as a leader to the NAIC. “We are excited and privileged to have Senator Nelson and Governor Schafer join our team,” says Agenda’s Craig Pattee, a partner in the firm. “These guys reflect our business strategy. They know how to work across the aisle to get things done and understand the nexus between modern grassroots advocacy, governors and states and the federal government.”
Some have said Vaughan would be a tough act to follow—besides her NAIC experience, she served as the longest-serving insurance commissioner in Iowa history, from 1994 to 2004, as well as a past NAIC president and as a professor of insurance and actuarial science at Drake University. Vaughan also served on the board of The Principal Financial Group. She was a member of the executive committee of the International Association of Insurance Supervisors (IAIS).
The NAIC retained executive search firm Egon Zehnder International to help find and recruit a CEO.
Arthur D. Postal contributed to this story.