Kreidler Tells IIABW He Will Create Responsive Regulatory Body

Washington’s new Insurance Commissioner gave the Independent Insurance Agents & Brokers of Washington something to hope for at the IIABW Legislative Day in Olympia on Jan. 31.

Bill Stauffacher, IIABW lobbyist, introduced Kreidler as “a breath of fresh air,” and indeed, many sighs of relief were heard from the audience during the Commissioner’s subsequent speech. It was readily apparent that Kreidler has a party affiliation (Democratic) in common with his predecessor, Deborah Senn, and little else.

Eight years ago, Senn spoke to a similar IIABW gathering and outlined an ambitious agenda of healthcare reform. Eight years later, Kreidler outlined an ambitious agenda of restructuring the State Office of the Insurance Commissioner (OIC).

Later, in an interview with Insurance Journal, he addressed another profound difference between himself and Senn, a two-term commissioner who ran unsuccessfully for U.S. Senate last year. Where Senn was consistently high-profile and popular with the voters (at least as Commissioner), Kreidler said he will work mostly behind the scenes to restructure his office and build consensus on key issues.

“I don’t come in with a political agenda with the idea that it’s a stepping stone to another office,” Kreidler said.

The remodeling has already begun. He told the IIABW gathering he has fewer OIC employees devoted to public affairs (read: image building) than Senn did and more staffers concentrating on programs. Like any commissioner, Kreidler has assembled his own management team, plucking Mike Watson from the Washington Department of Labor & Industries to be chief deputy and bringing back two respected deputies of former Washington Commissioner Dick Marquardt.

Kriedler currently has three committees within the OIC examining ways to enable the office’s many departments to communicate more effectively. He wants to have a plan established and the changes put in place within two months. By summer, he hopes to have an OIC “as responsive as possible” to consumers and the insurance industry.

“We’re working hard at a thoughtful reorganization,” Kreidler said. “We’re going to make sure that communication within OIC works as well as possible.”

Also by summer, Kreidler expects to have the OIC reaccredited by the National Association of Insurance Commissioners as part of the NAIC’s solvency regulation program. The OIC ran afoul of the NAIC because of a lack of auditors to perform financial examinations of insurers, a result mostly of the OIC’s inability to pay examiners enough to keep them from taking jobs in the private sector.

Senn, thanks to a budgetary sleight of hand, was able to free up enough funds to hire a sufficient number of auditors.

“The issues that cost us accreditation have been corrected,” Kreidler said, noting that the OIC needs to complete its current backlog of carrier examinations and then have the NAIC audit those exams. If the NAIC deems the OIC examinations properly done, accreditation will be restored, he said, probably by late spring or early summer.

Long-term, Kreidler said, Senn’s budgeting trick won’t work, and legislation will be required to enable the office to adequately fund its auditing function. Prospects for such legislation this year aren’t great, given the down-the-aisle split of the Washington Legislature (49-49 in the House, a 25-24 Democratic majority in the Senate) and the preoccupation with energy and transportation issues.

Still, Kreidler’s OIC will be active this legislative session. He has already introduced a producer licensing measure, SB 5654, that has the blessing of the IIABW and other agent groups. SB 5654 is designed to satisfy the requirements of the Gramm-Leach-Bliley federal financial services legislation by creating reciprocal licensing arrangements in which producers in good standing in other states with similar standards would be eligible for nonresident status in Washington.

Kreidler, however, wants the reciprocity to include key requirements in Washington law, namely fingerprints on record, a posted bond and separation of agency business and trust accounts. “I think we can keep all three of those things,” he said, well aware that such standards are higher than those proposed by the NAIC in its producer licensing model act.

Where Senn had a contentious relationship with the Legislature, particularly in her own party, Kreidler believes his 16 years as a Washington legislator (1977-93) and reputation as consensus builder will go a long way in Olympia. “I know a lot of the players,” he noted.

He also seems to understand that his office can regulate the market, not define
it. “The success of the regulator is, in part, related to the success the industry is having,” he told IJ. “The place I want to regulate, because it’s so much easier, is a healthy market.”

While not mentioning Senn by name, Kreidler made it clear he’s no fan of heavy-handed regulation, unless it’s necessary. “You might be able to win points in a public opinion poll,” he said, “but it isn’t going to last.”

Topics Legislation Agencies Washington