The National Association of Insurance Commissioners (NAIC) is searching for that special someone, and although no name has yet jumped off the page, the search is on for that “rare individual—who will bring needed credibility to the NAIC in Washington and be a facile communicator capable of amassing support to stop federal intrusion into state regulation,” according to a top NAIC official.
The next CEO of the NAIC, with the imminent departure of Terri Vaughan, 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 on Monday.
“It will take a special person to take us to the new level,” he said. 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.
Donelon said he had just gotten off the phone with a colleague and had told the person that his choice for the next NAIC CEO would be more important than anything else he does next year as elected NAIC president.
In discussing qualifications of such a person, Donelon said there must be “gravitas to that position,” and it must be a person that commands respect and can articulate our successes to Capitol Hill [and the Administration.]
He didn’t shy away from the suggestion of a political figure or a state governor, but noted that the NAIC cannot pay, say, what a Washington insurance trade association pays for successful ex-governor-leaders.
The NAIC is not registered as a lobbying organization nor are its employees, so any candidate would be not acting as a registered lobbyist as is common with former politicians (a 2011 Tax Form 990 for the American Council of Life Insurers (ACLI) shows both the immediate past president and current president (former Idaho Gov. and George W. Bush cabinet member Dirk Kempthorne) earn just a bit under $1,000,000 in stated annual salary (about $977,000)—but some trade association chiefs top even that).
In January of 2008 the NAIC released pay information for top executives that stated that previous NAIC CEO, Cathy Weatherford’s base salary was $370,000. Compensation apparently also came from other NAIC project sources. The NAIC no longer discloses top officials’ salaries as it used to, but one source said that Vaughan makes about $675,000 from all NAIC sources/bonuses.
Donelon called Vaughan “irreplaceable, a person who has done an outstanding job for us in raising our profile in the international arena,” enhancing the NAIC profile and its credibility particularly abroad. Donelon said that he even pleaded with her to stay throughout his upcoming term as NAIC president noting, surprisingly, that she also tried to leave a year ago and current NAIC President and Florida Insurance Commissioner Kevin McCarty begged her to stay on through his term, and she did.
But for Donelon—no dice—she wanted to get back to family, her son’s projects, and editing the text book (Fundamentals of Risk and Insurance, which she originally published in 2004 with her late father, Emmett Vaughan and which was last revised in 2007) he and others have said. Vaughan will be at the NAIC Fall Meeting, which kicks off November 29, the NAIC said. Her last day is November 30.