I felt dizzy when I heard that another former president of the National Association of Insurance Commissioners, Alabama's Walter Bell, was quitting to move into the industry he had been supervising. It's that queasy feeling you get when you go around and around in a revolving door. And I am not the only one who thinks this is getting out of hand.

Indeed, just as I was about to pen a column on the topic, NU's Life & Health weekly editor, Steve Piontek, took the words right out of my mouth. His own column follows, and we invite you to respond:

Phew!
By Steve Piontek

Alabama Insurance Commissioner Walter Bells move to a very senior position at a major reinsurer fails the proverbial smell test miserably. So blatant and audacious a disregard for appearance and propriety can only be called shameless. Unfortunately, it is but the latest in a string of shameless moves of insurance commissioners to the ranks of the industry they were charged with regulating.

Yes, my friends, we are back to taking one more turn through the revolving door headquartered in Kansas City, Mo., and otherwise known as the National Association of Insurance Commissioners.

It was announced on Aug. 19 that Bell was leaving the Alabama department to become chairman of Swiss Re America Holding Corp.

Alabama law is pretty clear on situations like this. What it states is: No public official or public employee who personally participates in the direct regulation, audit, or investigation of a private business, corporation, partnership, or individual shall within 2 years of his or her departure from such employment solicit or accept employment with such private business, corporation, partnership, or individual.

You would think this would apply to the commissioner of a department. But no.

So how did Bell get around this seemingly insurmountable obstacle vis a vis employment with Swiss Re, at least a few of whose units are regulated by Alabama.

Well, it works out serendipitously because you see Bell will not be working for any of those units. Hes going to be working for the holding company.

Thank goodness for that! That loophole obviates what might otherwise seem like a huge conflict of interest, doesnt it?

Were following the letter of the law, see. It says so right here.

Never mind that the spirit of the law has been tied up, trussed up and thrown overboard with nary a glance back.

And lets not forget that this arrangement had to have been carried out while Bell was still the nominal head of the Alabama department that was overseeing some Swiss Re units. But its okay since the negotiations were with the holding company.

NAIC-funded consumer reps were right to be outraged over the revolving door at the NAIC. They called on the NAIC to institute a strong conflict of interest policy which includes a prohibition against lobbying the NAIC or other insurance regulatory bodiesfor a period of two years following departure from public service.

The reps continued, saying, The movement of regulators to industry feeds the perception that NAIC leadership positions are a stepping stone to future industry employment. Instituting a strong conflict of interest policy with revolving-door safeguards would help erase that image

NAICs response essentially was a shrug of the shoulders: We have an ethics policy in place, but we cant enforce it. Thats up to the individual states.

I would actually go further than the consumer reps. Rather than simply having a two-year lobbying ban, I would suggest that the situation calls for a two-year employment ban in the industry.

Yes, I can hear the howls and the squeals. Dont you know this is America and even insurance regulators have to support their families, pay the bills, put their kids through college? But I say if you are going to go into public service in the first place, it should be to serve the public unreservedly and not as a launching pad for a position where the really big bucks are to be made.

Companies, too, need to understand that they are just as responsible for the revolving door, since theyre the ones that are dangling those big-buck positions.

Its way past time for some really powerful air freshener in this business.

***

I couldn't have said this better myself, and I agree with Steve's take completely.

While I understand it's good to have regulators who actually understand the business they are overseeing, and that people have a right to earn a living, the idea that leading regulators can count on high-paying jobs in the business they supervise really undermines their credibility and effectiveness.

There has got to be a better way.

What do you folks think?

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Stop The Regulatory Revolving Door!

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