Therese Vaughan, the former Iowa insurance commissioner named chief executive officer of the National Association of Insurance Commissioners, said the organization will focus on educating federal lawmakers about insurance.

Ms. Vaughan held a telephone news conference yesterday after her appointment was announced at which NAIC said the Kansas City, Mo.-based group will now call Washington its headquarters and Ms. Vaughan detailed plans for the organization's beefed-up Washington presence.

One of her functions, according to Ms. Vaughan, will be to establish an NAIC Office of Insurance Information. Ms. Vaughan said that while she can understand concerns over how it could be a first step to establishing a federal regulator, “we need someone in federal government who is conversant on insurance.”

In addition to announcing that its new headquarters will be in Washington, NAIC said Andrew Beale, who acted as interim CEO during the seven-month search to replace Catherine Weatherford, who left in July, will become chief operating officer. He will also retain his current position as NAIC chief legal officer.

Ms. Vaughan said the NAIC will add several staff positions to the current complement of 16 already in Washington. The staff of 377 in Kansas City will be retained as will the New York staff of 48.

Ms. Vaughan said the NAIC first approached her about the CEO post in early December and negotiations were completed yesterday the morning.

During the press conference, NAIC officials said Ms. Vaughan's compensation would include salary, a cost of living increase and moving costs to Washington. The actual salary was not given. Her predecessor, Ms. Weatherford, was paid $370,000 a year.

Ms. Vaughan said in taking her new job she resigned positions on boards of directors of Principal Financial, Des Moines, Iowa, and the Insurance Marketplace Standards Association, Washington.

Ms. Vaughan was asked about a recent General Accounting Office report suggesting that the need for a federal insurance regulatory entity should be examined along with the possibility of creating an optional federal insurance charter.

Ms. Vaughan responded that concerning OFC, “I agree that they could consider it. They have in the past.”

When asked if it is feasible to split life insurance with an optional federal charter, she responded, “I'm not clear how that would work,” noting that a lot of ideas are currently being explored.

Explaining her position on state-federal insurance oversight, Ms. Vaughan referred to her comments in a May 2008 National Underwriter editorial where she described what she believes are the responsibilities of an insurance commissioner: “The first and primary responsibility” is consumers and dealing with state legislatures on local problems; then, activity on the national level; and finally, international issues.

But her editorial also noted that the “U.S. insurance regulatory system is structurally unable to speak and act with one voice, try as it may. This problem is exacerbated by the turnover in leadership at the NAIC, with a new president and possibly a new agenda every year.”

The Treasury Department's Blueprint for a Modernized Financial Regulatory Structure that was released, she wrote, aims to address issues including participating in an international market and it deserves Congress' consideration.

Under such a proposal, she continued in her editorial, state regulators could continue to offer their expertise and there would be a single office representing U.S. interests internationally.

She said she could not address the issue of how to energize the Interstate Insurance Product Regulation Commission, nor had she considered who would be its new executive director.

Ms. Vaughan initiated and helped develop and advance the Compact Commission which resulted in the creation of the IIPRC.

Special Reports /

New NAIC CEO Details Washington Aims

Related Stories

Recommended For You