New York state Insurance Superintendent Eric Dinallo will resign effective July 3, amid speculation the former prosecutor may run for state attorney general.
Dinallo, who was a top aide to former Democratic Governor Eliot Spitzer when he was state attorney general, will become a visiting finance professor at New York University’s Stern School of Business, Paterson said in a statement.
New York’s insurance chief is the most prominent of U.S. state insurance regulators given New York’s position as America’s financial capital. And Dinallo’s profile has been particularly high given the integral role he has played in the near-meltdown of insurer American International Group and other areas of the credit meltdown.
“He has been superintendent during one of the most turbulent times ever, and he has done an exceptional job,” said Howard Mills, who was New York’s insurance regulator before Dinallo.
Mills, who is now chief adviser for the insurance industry group at accounting firm Deloitte, added that Dinallo’s performance as insurance regulator will open many doors to him in both the public and private sectors.
In 2003, Dinallo left the attorney general’s office, becoming managing director of regulatory affairs at Morgan Stanley. In 2006 was named general counsel for insurance broker Willis Group Holdings.
Insurance regulators across the United States have in past used the position as a stepping stone to bigger public roles, said William Latza, a partner with law firm Stroock & Stroock & Lavan.
“The state insurance system is going to be a little poorer for the fact he is not going to be involved,” said Latza. “What really has made him special was his willingness to challenge the status quo; to stand back and question.”
An insurance department spokesman said Dinallo, who has held the post since 2007, was not immediately available to comment on his plans. And a spokeswoman at the governor’s office declined to comment on when Dinallo’s successor will be named.
In May, Dinallo told Reuters he had not yet made a final decision about whether to stay in public office, or return to the private sector.
AG Run Ahead?
The current state attorney general, Andrew Cuomo, also a Democrat, would beat Governor David Paterson in an election, according to recent polls. The next gubernatorial election is in 2010. Cuomo has not said he plans to run for governor, an office his father, Mario, held from 1983 to 1994.
Paterson saluted Dinallo for overseeing the state’s response to the global credit crisis and the near-capsizing of bond insurers and AIG. “Under Superintendent Dinallo’s leadership, the department effectuated the largest regulatory settlement in the U.S., played an integral part in the reform of the workers’ compensation system and facilitated more than $15 billion in new capital for the bond insurance industry,” Paterson said.
Dinallo, in a statement released with the governor’s, said: “Our efforts aimed at financial fairness and economic protection for policy-holders of all kinds, from new homeowners to the largest employers, are vitally important for New York’s future.”