Let's say that you're the Utilities Commissioner of your state, responsible for overseeing the conduct of the electric and phone companies. Would it not be an insurmountable conflict of interest for you to resign your post to become president of your local electric company?
Of course it would, and there are laws against it.
Same thing with insurance commissioners, right?
Walter Bell was, until last month, the Insurance Commissioner for the state of Alabama, and the immediate past president of the National Association of Insurance Commissioners. One would think that a person in this position would be enjoined from leaving one's post to take a job with an insurance company which does business in one's state.
One would be wrong.
Oh, sure, both the state and the NAIC have rules against this sort of thing, but these rules apparently read:
"Thou shalt not jump directly from thy high and exalted regulatory position to become an executive of an insurance company."
(I'm paraphrasing, of course: "high and exalted" would really read "reasonably but not extravagantly compensated.")
Quick: what's missing from that little law?
If you said "or else what?" you win a cheroot.
Absent any "teeth," such rules are meaningless, a fact which apparently did not escape the notice of the aforementioned Mr Bell. He's now the Chairman of Swiss Re, a large reinsurance carrier which is connected to many insurers which do business in the Yellowhammer State.
In fairness, his response is along the lines of "well, I'm not working for the companies I regulated, just the company that owns the companies I regulated. Big difference, bub."
Well gee, kinda hard to argue with logic like that, right?
And it's not as if his job entails any kind of lobbying on behalf of Swiss Re with his erstwhile colleagues: he'll only "oversee and direct regulatory and public affairs for all of Swiss Re’s North America businesses."
Nope, no conflict of interest there, nothing to see, move along.
And folks wonder why the insurance industry is held in such low regard.
AIG UPDATE: Meanwhile, several days in, neither of the primary life or health insurance agents associations have anything on their sites relating to the recent AIG debacle. Of course, this is no surprise: they're most likely still trying to figure out how to spin this as "a good thing."
And the PIA (which is geared more toward P&C agents) has a news release announcing the acquisition, but no official statement regarding it. Again, why would this obscure, indeed trivial story be of interest to insurance agents?