The National Association of Insurance Commissioners (NAIC) is expected to announce the hiring of a new CEO this week, as early as Wednesday.
A list of possible candidates recommended to headhunters last fall included former governor and Sen. Ben Nelson, D-Neb., who just left office after deciding not to run for a third term; former NAIC official, Rep. Earl Pomeroy, D-N.D.; immediate past NAIC president Kevin McCarty, insurance commissioner of Florida; his immediate predecessor Susan Voss of Iowa, and various life insurance and property casualty reinsurance lobbyists.
Sources suggested that Nelson, who reportedly has met with influential Washington folk at the Federal Insurance Office and at trade associations, will raise the profile of the NAIC and raise the stakes on international and national harmonization.
The NAIC announced in August that then-NAIC CEO Dr. Therese M. (Terri) Vaughan would be retiring from the NAIC, something she had been contemplating for at least a year – according to sources, she was prevailed upon to stay on a year longer.
If the choice is Nelson, a moderate who has served as an insurance commissioner and has a foundation as an insurance executive, many in Washington, on both sides of the aisle, interviewed over the past weeks when Nelson's name was floated around the Beltway have endorsed the choice already. People have called him a strong leader who understands the state system and who works well with others, is both pro free market and consumer, and can represent the views required in many forums.
Whoever has been chosen will face federal regulatory pressure from many fronts, and consumer coverage issues and crises; deal with issue such as availability and affordability in the face of global warming, building safety; and must integrate national reforms and legislation with state regulatory system, while championing it at the same time. Dodd Frank and the Patient Protection and Affordable Care Act implementation mixed with state politics and resource issues loom large, as does flood insurance, fiscal issues and economic recovery.
Vaughan left the association earlier than expected, on Nov. 30 rather than the first quarter of 2013, and Andrew Beal became acting CEO for the second time.
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.
The next CEO of the NAIC will be selected to “protect the state-based system that has served us so well for over 100 years,” said NAIC President-Elect James J. (Jim) Donelon of Louisiana in a phone interview last fall.
“It will take a special person to take us to the new level,” he said then. No one had been identified yet, and the interview process has not even begun, although it could, next month.
When asked what the next level referred to, Donelon said, “My reference is frankly on Capitol Hill (both the Congress and the Administration) where the challenge is the greatest.”
That’s because of the emergence of the federal government in the insurance arena.
“We support it as necessary on the international level but we don’t feel it is appropriate for the federal government to take over or even further encroach on the success of state regulation going back over 100 years now,” the Louisiana insurance commissioner said.
Hiring the correct person is “vitally important for the preservation” of the state insurance system.
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 Feb. 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 Weatherford's salary at $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.
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.
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 (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. She was also 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.