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Life Health > Life Insurance

Rathgeber takes over Texas Insurance Dept.

By Elizabeth D. Festa, Chad Hemenway

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Gov. Rick Perry has appointed Julia J. Rathgeber of Austin as the commissioner of Insurance to replace former Texas Insurance Commissioner Eleanor Kitzman. Rathgeber’s term expires Feb. 1, 2015.

Rathgeber is a lawyer with an undergraduate and law degree from University of Texas at Austin and political figure, serving until today as the deputy chief of staff for Lt. Gov. David Dewhurst.  

Her experience is not insurance-related but instead in environmental and conservation roles. Rathgeber was director of research for the Texas General Land Office and a past director of the strategic assessment division for the Texas Natural Resource Conservation Commission — now the Texas Commission on Environmental Quality.  

However, she does have soem insurance-related experience, Texas say.

“The new commissioner, Julia Rathgeber, was an excellent choice for commissioner of insurance.  She has years of experience in Texas state government, has worked on insurance issues while at the Lt. Governor’s office and is known for her ability to build consensus around difficult issues,” said Kimberly A. Yelkin, a partner with Gardere Wynne Sewell LLP in Austin. The firm is involved in regualtory and legisaltive law and recently drafted a piece of legislation which will allow for the formation of captive insurers in the state of Texas. This bill will become law Sept. 1, 2013.   

The Texas online directory now has Rathgeber listed as insurance commissioner, but a spokesman was not sure if she was in the office today.

Eleanor KitzmanKitzman (right) was forced to resign because she could not get confirmed by the state legislature, which, according to press reports, wanted a formal appointment letter from Gov. Perry supporting her confirmation amid criticism from both chambers for being either too close to industry or too anti-industry depending up on the partisanship of the members. 

Rathgeber will not need to undergo the same process of confirmation until the state legislature meets again in two years. 

“Julia is an experienced public servant with a strong grasp of regulatory issues,” R Street Texas Director Julie Drenner said. “We look forward to working with her on reform of the Texas Windstorm Insurance Association, and particularly to our proposals to increase the agency’s transparency and limit its subsidies to the wealthiest property owners.”

The American Council of Life Insurers shared the sentiment. “We look forward to working with Commissioner Rathgeber. The life insurance industry has a significant presence in Texas. 556 life insurers are licensed to do business in Texas and 121 are domiciled in the state. In 2011 alone, life insurers paid $5.3 billion in death benefits and $4 billion in annuity benefits.” 

A spokesperson for the department said Kitzman’s last day in the office was May 27. The spokesman was not aware of her future plans although she has made clear to National Underwriter’s property casualty edition earlier this month she would get another job. 

Kitzman was known for her international regulatory involvement and her work shepherding the rancorous debate over Actuarial Guideline 38, (AG38) from a regulatory food-fight into an NAIC-industry-agreeable solution. Kitzman led a joint working group of the Life Insurance and Annuities, and the Financial Condition Committee.

This commissioner-level working group was created  under then-NAIC President Kevin McCarty’s leadership.

The work involved reviewing and realigning reserving methodologies for certain universal life products with secondary guarantees (ULSG) and creating a unified approach. It also involved hiring outside consulting actuaries.

As chair of the working group, Kitzman made it clear after listening to industry concerns that “many things are to be worked out but a level playing field is at the top of the list.”

The NAIC’s Joint Committee took a bifurcated approach between old business and prospective business that created revisiting reserves for prior years for some companies.

Kitzman was appointed in August 2011 and her term was set to expire, requiring state Senate confirmation, in February of this year. 

During an interview with Chad Hemenway of National Underwriter’s PC360 edition on May 21 in Austin, Kitzman said she hadn’t “thought about leaving her post,” but was instead “focused on doing my job for as long as I have this job.”

Kitzman referenced the people of the small, farming community of West, Texas — site of the massive fertilizer explosion last month — to explain her philosophy: “I spent a lot of time [in West],” she said. “Farmers maybe have a different view of the world. Life goes on. There is a still a job to do, no matter what.”

At the time of the interview on May 21, it appeared unlikely Kitzman would receive confirmation. Kitzman also was scheduled to appear on a panel at the NAIC International Forum in Washington, D.C., May 10-11, but could not make it possibly due to her confirmation troubles in Texas. 

At the time, Kitzman acknowledged her uncertain job future by saying: “This is what I do, not who I am. I’ve had a job before this one and I’ll have another one after it.”

One such previous job was as director of the South Carolina Department of Insurance before coming to Texas. She also worked in the private insurance and reinsurance industries.

Kitzman is not the only one leaving the Texas Department of Insurance. Additionally, well-regarded Danny Seanz, deputy commissioner of the financial regulation division, who does a lot of NAIC committee work, and Audrey Seldon, deputy commissioner of the compliance division, are retiring later this year, PC360 reported.

Senate Nominations Committee Chairman Glenn Hegar Jr., R-Katy, Texas, told PC360 that he had listened to “adamant” senators for and against Kitzman, who took over for Mike Geeslin after he left the post midterm.

Without going into specifics, Hegar says those against Kitzman are upset with the “way [Kitzman has] handled some issues.” Lawmakers have previously spoken about the commissioner’s tendency to approve homeowner’s insurance rate hikes without much scrutiny.

Sen. Kirk Watson, D-Austin, who is on the Senate Nominations Committee, flatly told PC360. “I’m not for her.”

Kitzman reportedly fell to windpool insurance issues, politicking and other issues involving legislative foes in 2007 in South Carolina  under then-Gov. Mark Sanford when insurance commissioner.

She was later executive director of the state’s Budget and Control Board under South Carolina Gov. Nikki Haley before being chosen by Gov. Perry to lead the Texas department.  At that office she had five bosses and ran afoul of at least one of them when she received flack for earlier comments  made in a March 2011 editorial defending her friend (and one of her bosses) Gov. Haley on recent controversial administrative decisions with tough language from hard-learned life lessons. 

“We must be fearless and willing to work hard, make good choices and, most importantly, never give up in pursuit of a dream,” she wrote in the 2011 newspaper editorial.  Earlier news accounts have noted Kitzman did not grow up in a “Leave It to Beaver” household and overcame many odds with determination and grit.  

Kitzman is also a former clerk for the Texas Supreme Court, and a past associate at Akin, Gump, Strauss and Feld. She has been a member of the State Bar of Texas and South Carolina Bar Association.

Kitzman received a bachelor’s degree from the University of Houston and a law degree from South Texas College of Law. 

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