Maria Vullo confirmed as New York's top financial services regulator

Members of the New York state Senate have voted to make Maria Vullo the superintendent of the New York State Department of Financial Regulation.  

Gov. Andrew Cuomo, a Democrat, nominated Vullo to succeed Benjamin Lawsky as the head of the department in February.

The department oversees about 1,500 insurers and about 1,600 financial institutions.

Since at least the early 1900s, when controversies surrounding allegations of extravagance at New York City-based mutual insurers led to a series of congressional hearings, New York state has had a reputation for taking a tough, conservative approach to life and health insurance regulation. In recent years, the state’s Life Bureau has resisted a movement by the National Association of Insurance Commissioners to support a shift to principles-based reserving in life insurance.

Related: Lawsky: NAIC’s new reserving system will lead to shortfall

Advocates of principles-based reserving want insurers and their actuaries to depend less on fixed formulas and more on the advice of actuaries when setting reserves. Supporters say a principles-based approach will help insurers do a better job of setting appropriate reserves. Opponents have argued that some insurers will use actuaries’ analyses as an excuse to set reserves below safe levels.

In the past year, the New York department has shared responsibility for overseeing Health Republic Insurance of New York, a nonprofit, member-owned carrier started with funding from the Affordable Care Act Consumer Operated and Oriented Plan program. Regulators announced a sudden shutdown of the carrier last fall, a few days after the carrier settled a dispute with an employee out of court. The Health Republic failure highlighted New York’s lack of guaranty fund protection for health plan enrollees.

Related: New York starts official Health Republic liquidation proceedings