When Jim Wrynn “signed up” for the top job in New York’s muscular insurance regulatory arm, he inherited a lot of work in progress, but would make his mark with innovations realized under a low key styled, but no less achievement driven regime.

The Superintendent of Insurance sent his mandatory resignation to the transition team that is architecting the Cuomo administration, though many believe it will turn out to be symbolic by March or even April—later than ususal, this time—when Wrynn’s reappointment will be announced. Key industry observers—asking to have their names withheld—hold that he has done a sound, good job, that his best work is not done yet and that his term would be wisely extended by the incoming administration. One veteran of Association leadership summed it up: “You can work with him, he listens well and has no agenda of his own – that’s a big plus.” Very few have even remotely harsh words for Wrynn—even off the record—whose personal style is easy and engaging, yet spare. There is none of the imperiousness here that marked some other administrations at NYSID and there is increased circumspection in the Department’s approach, fitting, it seems, with the tenor of the Cuomo team. The transition team may very well look upon the Wrynn NYSID term as a stand out within a period of significant change and sliming grid lock in Albany. Of course, there’s practical politics in the team’s decisionmaking formula, never to be underestimated no matter how lofty the rhetoric from the second floor. Wrynn does not lack credentials in his party nor recognition with Cuomo, according to insiders, so this may be less a factor than in other appointments. As Superintendent, Wrynn has “upped” New York on the international stage, at NAIC, and has championed the State as a place to do business during the mess of taxes, scandals, the financial melt down and the rest. This same battle would be better waged—even successful—in a different, more popular Governor’s administration.

And if, as many suspect, the slimming down of State government includes a consolidation of the Insurance and Banking Departments—with insurance the weightier and more complex of the two—Wrynn has the clear potential for running the new entity, given his relevant experience in financial services. Whoever gets the job faces some substantial problems: no fault, no fault, and more no fault reform; doing more with less: the downsizing of government and its departments; Med Mal; solvency standards; healthcare; and the big issue, that is, that New York’s status as a financial center—having eroded— needs to be re-established through a receptive, pro-business entity that will balance the powerful interests of the powerful parties at the powerful table that the Superintendent sets and heads.

Maybe after reading this, Jim Wrynn or any sane person would wonder why he would want the job—it’s not the money. After several meetings with the “incumbent”, I would have to conclude that there is a genuine public service ethic in the man—he’s the Superintendent who chose to speak to agents in Long Island when he was scheduled to attend a warm climate conference, who is on time for meetings, really returns calls, is always prepared and is so very different from the overly assertive types who can find their way into even petite power spots in the State. It’s a neat style of collegiality versus the undue assertiveness or self righteousness of some who have held the office.

If Wrynn has seemed to be a bit tentative or over cautious at times, it’s because he has appeared to place careful, circumspect action by his administration above self promotion—a modus operandi that may suit the Cuomo team handsomely.

With the Department’s help, we have assembled what has happened on his “watch”—below—and, while we have disagreed with the Department on Producer Compensation Disclosure regulation—an issue Wrynn inherited—and on some other issues, we regard this record as much better than just reasonably good. It has been said that the New York State Insurance Department is so well set up and, its staff, so strong and deeply entrenched that, to use an analogy, any new orchestra leader merely needs to lift his baton and make sure he waves it in the air in some seeming sequence, to succeed, because the orchestra plays quite well almost by itself.

We do not agree, particularly now that the music is changing and the players and the instruments are constantly new. A little experience on the podium will keep the tempo lively and the audience positively motivated. New York State needs some rave reviews and some applause in this sector.

 

On the Record…

New York State Insurance Department 2010

Health care is now available to consumers with pre-existing health conditions as the result of the Department’s work on establishing the New York Bridge Plan and the Department will continue its work to establish the New York Insurance Exchange to create an insurance marketplace.  

While health care reform dominated headlines in 2010, the New York State Insurance Department, charged with implementation of the reforms, attacked several important issues the during the past year. “Working through the National Association of Insurance Commissioners (NAIC), the Department participated heavily on such issues as financial regulatory reform, the many components of the comprehensive health care reform act and such important international issues as solvency modernization initiatives which include reviewing EU Solvency II, systemic risk supervision of internationally-active insurance groups and the convergence of international accounting standards” according to Jim Wrynn, Superintendent, NYSID, who added: “We number other critical actions among the list of accomplishments we note for 2010.”

The Department’s agenda this past year has had a direct focus on consumer issues, especially in health, homeowners’ and life insurance products. Health insurance rates charged to consumers in community-rated health plans will be reduced by an average of 2.5% because of action by the Department. Health care is now available to consumers with pre-existing health conditions as the result of the Department’s work on establishing the New York Bridge Plan and the Department will continue its work to establish the New York Insurance Exchange to create an insurance marketplace. The Department continues to explore how to fix the affordability and availability of insurance in coastal areas. Other major issues summarized by the Insurance Department in 2010 included: Streamlining the Rate and Form Review Process

• Launched an initiative proposed by Superintendent Wrynn designed to identify methods to streamline the process for the review of rate, policy, license and other industry filings. A joint-Department-industry working group developed a set of specific recommendations to significantly improve the review process for insurance filings. The improvements will foster more efficiency, better protection of consumers, competition in the insurance industry, and a reduction in unnecessary costs and burdens on regulated entities.

Maintaining New York’s World Class Status

• Demonstrated international leadership as Superintendent Wrynn served as Vice Chair of the International Insurance Relations “G” Committee, actively working and traveling to international meetings to ensure the NAIC plays a leading role coordinating international insurance regulation.

• Established a working group to explore the idea of recreating the New York Insurance Exchange as a means of maintaining New York’s status as a world financial capital.

• Represented the United States as a member of the International Association of Insurance Supervisors’ (IAIS) and participated on numerous committees including the Financial Stability Committee and Technical Committees, as well as the Common Assessment Framework Task Force and Solvency and Actuary Issues Subcommittees.

• Adopted a revised reinsurance regulation so that collateral requirements for unauthorized reinsurers aligns with global standards that take into account the financial strength of reinsurers. National Leadership

• Won national leadership with the election of Superintendent Wrynn as Chair of the NAIC’s Northeast Zone, making him a member of the NAIC’s Executive Committee where he will help to set policy on national insurance regulation.

• Continued to work with the bond insurance industry to recapitalize and restructure impaired companies and promote new entries into the market. Health Insurance Reform

• Succeeded in cutting premiums on average by 2.5% for consumers in community-rated health insurance plans after working aggressively to gain prior approval authority over health insurers for the first time in more than a decade.

• Established the Bridge Plan to provide health coverage to eligible uninsured individuals who have pre-existing health conditions until more comprehensive options become available through a Health Insurance Exchange in 2014.

• Began work with the Department of Health to develop New York’s Health Insurance Exchange which will be designed to offer options for price competitive, quality health care starting in 2014.

• Developed implementation timelines and working plans for adoption of federal health care reform in New York in conjunction with the Governor’s office and Department of Health.

• Briefed President Obama, as well as New York’s Congressional delegation numerous times on the potential impact of federal health care reform for New Yorkers.

• Warned health insurers that they needed to more accurately explain the causes of premium increases to consumers instead of simply blaming increases on new federal reforms.

• Issued a certificate of authority allowing creation of the Tompkins County Municipal Health Insurance Consortium to provide comprehensive health coverage for more than 2,000 enrollees. Consumer Protection

• Enacted a new regulation that will mandate, effective Jan. 1, 2011, the disclosure of a producer’s role in insurance transactions, as well as the disclosure, upon request by the insured, of the producer’s compensation so that consumers understand producers’ motivations and potential conflicts-of-interest are minimized.

• Drafted a proposed regulation to ban the sale of unsuitable life insurance policies and annuity contracts when it is clear that buying these products hurts consumers.

• Fined three Citigroup-affiliated insurance agencies $2 million to resolve insurance law violations stemming from providing consumers with inaccurate or incomplete disclosures in connection with life insurance and annuity transactions.

• Fined the American Medical and Life Insurance Company $700,000 and directed the company to discontinue its New York sales and the national advertising of its limited medical benefits insurance because of the company’s deceptive marketing practices.

• Obtained $1.2 million for New York from Allstate Insurance as part of a multi-state $10 million settlement in which the insurer agreed to implement procedures to ensure transparency and fairness for consumers filing bodily injury claims.

• Fined two Health Net companies $1.9 million to settle allegations including not providing consumers with the required information on their “explanation of benefit” forms and not paying certain claims on time.

• Fined Aetna Health Inc. $750,000 as part of a settlement resolving infractions relating to the administration of HealthyNY.

• Fined Cinergy Health Inc. $500,000 for misleading customers into believing they were obtaining comprehensive health coverage when buying low-cost limited benefit health plans.

• Imposed an $850,000 fine on Aetna to settle charges including incomplete disclosures on “explanation of benefit” forms to consumers and violations of New York’s prompt pay requirements.

• Fined AXA Equitable Life Insurance Company $1.9 million for violations including making inaccurate or incomplete disclosures to consumers buying replacement annuity contracts and life insurance policies. Keeping Insurance Available and Affordable

• Proposed a comprehensive package of new consumer protections to help homeowners in coastal areas by standardizing windstorm deductibles, reducing the number of nonrenewals an insurer may issue without approval and creating a catastrophe pool to stabilize premiums.

• Convened the first meeting of the Temporary Panel on Homeowners Insurance Coverage, charged with finding ways to keep homeowners insurance available and affordable in coastal areas.

Regulatory Reform

• Proposed legislation to regulate the title insurance industry and require the licensing of title insurance agents in order to end abuses and illegal practices in the area.

• Succeeded in encouraging the National Association of Insurance Commissioners (NAIC) to propose uniform regulation of reinsurance collateral reserves by all states.

• Continued to monitor insurer securities lending practices to ensure that these lending activities are conducted in a prudent manner and in compliance with the Insurance Law and issued a Circular Letter advising the industry of the Department’s expectations for insurers engaged in securities lending. Also, New York chaired the NAIC committee that adopted new accounting standards for security lending and additional disclosures which resulted in more transparency on a national basis.

• Helped change the way the credit risks of residential mortgage backed securities (RMBS) are evaluated when the NAIC adopted a New Yorkled proposal that called for a detailed analysis of RMBS instead of using rating agencies only.

• Started the process of licensing life settlement providers under the state’s first-ever life settlement law. Fighting Fraud and Abuse

• Continued fighting cases of insurance- related fraud and reported an overall increase in fraud convictions and investigations, many undertaken in partnership with other federal, state and local law enforcement agencies.

• Concluded a successful fraud investigation leading to the sentencing of an Albany claims examiner to prison for stealing nearly $500,000 from two insurance companies.

• Reported that six medical providers have reimbursed the state more than $2.4 million to cover the cost of inflated billings submitted to the New York State Health Insurance Program. • As the result of an investigation by the Department’s Frauds Bureau, the former president of Liberty Title Insurance Agency pleaded guilty to defrauding his clients and misappropriating and embezzling millions of dollars in escrow and other client funds.

• Participated in an investigation with the Department of Justice leading to indictments charging 17 people with participating in health care fraud and money laundering schemes. Supporting New York Communities and Consumers

• Responded to questions and concerns posed by individual consumers, Chambers of Commerce, various civic, neighborhood and consumer groups, and insurance agents and brokers during meetings at more than 60 locations across the state.