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Turmoil in South Carolina as Insurance Director Steps Down

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In what has been termed an abrupt departure, David Black announced his resignation as director of the South Carolina Department of Insurance effective Dec. 28, 2011.

The graduate of Clemson University and the University of South Carolina School of Law, and former President and CEO of Liberty Life Insurance Co., had only been appointed director last year by Republican Gov. Nikki Haley, also a graduate of Clemson.

“Through former Director Black’s leadership, the Department has worked to attract additional insurers to South Carolina, reorganized the divisions within the agency to more closely align the Department’s structure with the Agency’s mission, related functional areas and regulatory focus, and automated the Department’s licensing, taxation and financial and consumer reporting processes,” the department’s press release stated.

Adds: A Democratic source wellconnected in the state thinks Black was a businessman for whom the insurance department was not a comfortable place, when all was said and done — he wanted t oget back to his roots.

In the interim, Gwendolyn Fuller McGriff Acting Deputy Director of Financial Services and General Counsel will serve as Acting Director of Department until a new Director is appointed by Governor Haley.  McGriff has been with the South Carolina Department of Insurance for 16 years and has served the agency in various leadership capacities during her tenure including Acting Agency Director in 2004. She received her law degree from the University of Tennessee in 1986.

In unrelated news that predates Black’s resignation, the governor is under fire for allegedly steering a grant meant for studying federal health care exchanges to a foregone conclusion.

Senate Health, Education, Labor and Pensions (HELP) Committee Chairman Tom Harkin (D-IA) called for a federal investigation into whether Governor Haley exploited taxpayer dollars for political purposes.  In a letter sent Dec. 22, to Department of Health and Human Services Inspector General Daniel R. Levinson, Harkin requested that the IG determine whether Governor Haley improperly used a $1 million grant awarded to South Carolina for the purpose of planning their state health care exchange under the Patient Protection and  Affordable Care Act, and if so, whether the state should repay the taxpayers. 

The recently released emails published by the state Post and Courier reportedly demonstrate that Committee member and state Department of Health and Human Services Director Tony Keck was under clear instructions from Haley regarding the outcome of the process, according to Harkin. The committee referred to is the nonpartisan South Carolina Health Planning Committee established by Haley in March to decide whether or not the state should establish a health insurance exchange.

The state’s latest quarterly report shows that it has spent almost $109,000 of the federal grant on the committee’s activities, stated Harkin’s office, in reference to the news article.

“In authorizing exchange planning grants through the ACA, Congress intended that taxpayer funds would enable states, working in good faith, to carefully review insurance market options under state and federal law, including the ACA,” Harkin said in the letter.  

The Post and Courier reported that, “in a March 31 email … Haley wrote, ‘The whole point of this commission should be to figure out how to opt out and how to avoid a federal takeover, NOT create a state exchange,’ which is eventually what happened. “

The newspaper later reported, “But several Democrats and others who worked with the former director said he wants out of an administration embroiled in a controversy that entangles his agency.”

Government officals remained mum. The governor’s office, the South Carolina Department and Harkin’s office and Black did not return a press query.