The NAIC announced late Friday that its CEO Dr. Therese M. (Terri) Vaughan would be leaving earlier than expected, on November 30 rather than the first quarter of 2013, to be replaced by Andrew Beal as acting CEO before a leader is hired.
Beal has been with the NAIC for 13 years and currently serves as the chief operating officer and chief legal officer. He previously served as interim CEO between Cathy Weatherford's tenure and Vaughan's assumption for the post, or about six to seven months.
Earlier, 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 February 18, 2009.
The NAIC CEO Position, which used to have a disclosed salary, no longer does.
In January 2008 the NAIC released pay information for top executives that stated that Weatherford's salary was $370,000. The managing director of the Securities Valuation Office, was the next highest paid, at a base of $307,878, followed by Beal, at $262,500, back in 2008.
The NAIC CEO salary has probably been bumped up a lot since then. The NAIC budget was then $68.3 million—the NAIC 2013 proposed budget before fiscals and the modeling of structured securities includes total revenues of $80.8 million and total expenses of $78.1 million.
After the August announcement, Vaughan said in a statement, “it has become clear that an extended phase-out is unnecessary, and the organization is well-positioned to carry our progress forward. I wish the officers, members, and staff the best of luck in the future, and look forward to continuing to advocate for the protection of U.S. insurance consumers in my future professional activities."
Vaughan said in October she wasn't sure if she would be at the NAIC Fall 2012 National Meeting November 29 – December 2 outside of Washington, D.C., and it was still unclear this week, although some say she will be there to say her goodbyes.
Vaughan is looking ahead but has seemingly done it all in the insurance accounting and regulatory world—she served as the longest-serving insurance commission in Iowa history (1994-2004) 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 in Des Moines, Iowa, while a professor at Drake in the mid-2000s.
She is also a member of the Executive Committee of the International Association of Insurance Supervisors (IAIS).
The NAIC has retained executive search firm Egon Zehnder International to help find and recruit a CEO. The cost of recruiting expenses in the NAIC is over budget in 2012 and due to spike in 2013 due to the search for a new CEO to replace Vaughan, according to the organization’s proposed 2013 budget document.
The majority of the over-budget variance in 2012 is directly related to the CEO search. The 2013 budget assumes additional expenses related to the CEO search and an increase in reliance on external recruiting services for the attraction of NAIC employees in 2013, the NAIC stated in its budget.
"On behalf of the NAIC Officers and membership, I want to thank Terri for her outstanding service to our organization," said Kevin McCarty, NAIC President and Florida Insurance Commissioner. "Terri's expertise and insight have been invaluable following the global economic crisis of 2008. She has served as a globetrotter on our behalf as we've worked through financial reform and modernization efforts both domestically and abroad. We wish Terri all the best as she proceeds to the next phase of her career."
“Over her four-year tenure at the helm of the group, Vaughan distinguished herself as the public voice of state regulators who were pushing back against two simultaneous assaults on their authority from the federal government: the Patient Protection and Affordable Care Act and the Dodd-Frank Act,” wrote R.J. Lehman of R Street Institute after the news first broke in August.
"Terri brought a level of knowledge, experience and hands-on leadership to the NAIC that was critical during these challenging times. She understood the value of engagement with industry as well as with fellow regulators here in the U.S. and abroad. We shared the common goal of promoting healthy and vibrant private markets while preserving safety and soundness in the property-casualty insurance marketplace," stated Leigh Ann Pusey, president and CEO of the American Insurance Association.
The Vaughan textbook is Fundamentals of Risk and Insurance, which she originally published in 2004 with her late father, Emmett Vaughan. It was last revised in 2007.
The NAIC and IAIS did not immediately respond to inquiries about Vaughan’s attendance at meetings this month or her replacement at the IAIS if she does not retain her position there.
A couple people mentioned that the NAIC might turn from the nitty-gritty insurance expertise model of leadership to possibly hiring a former governor or politico to replace Vaughan. Weatherford was also an ex-state commissioner (Oklahoma.)
Vaughan holds a bachelor of Business Administration with high distinction from The University of Iowa, and a Ph.D. in Managerial Science and Applied Economics from The Wharton School, University of Pennsylvania.