Bloomberg News

Ex-Senator Nelson to Run Insurer Watchdog Group

January 22, 2013

The National Association of Insurance Commissioners named ex-Democratic Senator Ben Nelson to be its chief executive officer as the regulators’ group tackles U.S. President Barack Obama’s health-care overhaul.

Nelson’s duties will include working with U.S. and international agencies as overseers increase their scrutiny on financial firms, the NAIC said today in a statement. A former industry executive, Nebraska governor and state regulator, he was one of the more conservative Democrats in the Senate.

“We needed the gravitas, the phone calls returned, to go to Capitol Hill, to tell our story, defend our turf, and beyond, protect and promote our system around the world,” Jim Donelon, NAIC president and Louisiana insurance commissioner, said in an interview today at Bloomberg headquarters in New York. “I think all the way up to and including President Obama would return Senator Nelson’s phone calls.”

Regulators in the U.S. states are contending with the Federal Insurance Office created by the Dodd-Frank law, expanded U.S. involvement in health insurance and European efforts to regulate capital known as Solvency II. State regulation has served U.S. consumers and insurers well and deserves to be defended, Nelson said in an interview.

“To impose their standard solvency regulation I think is a mistake, and I hope to work to try to convince them of that,” Nelson said in an interview in New York. “It isn’t broken, so we’re not going to let them fix it.”

State Regulation

State commissioners are shaping their health-insurance markets to comply with the 2010 Patient Protection and Affordable Care Act. NAIC committees have considered standards for the online insurance exchanges mandated by the law.

Nelson provided the 60th vote needed to help push the health legislation through the Senate. He secured a provision exempting Nebraska from paying for expanded Medicaid coverage, derided by Republicans as the “Cornhusker Kickback.” Nelson, 71, later asked the provision be dropped and that all states get equal treatment.

Warren Buffett, the billionaire CEO of Omaha, Nebraska- based Berkshire Hathaway Inc. (A:US), praised Nelson for voting for the health-care bill in 2010.

“Senator Nelson knew that probably a majority of people in the state were not for it, but he went with what he thought was right,” Buffett said, according to an interview in the Lincoln Journal Star. “It is time for us to try to make an improvement.”

Insurance Exchanges

Eighteen states are building exchanges that will let uninsured residents buy medical plans starting in October. People who don’t get insurance through their employers would use the exchanges to select coverage from private insurers, often with taxpayer-subsidized premiums.

Some states are also revamping Medicaid programs for the poor by broadening eligibility rules. Congressional budget projections show that more than half of the 30 million uninsured targeted by the law will eventually buy subsidized plans through the state exchanges and at least 11 million others will become eligible for state-run Medicaid coverage.

Enrollment in the exchanges must begin by Oct. 1 for plans that will take effect next year. The U.S. government is giving states that run their own exchanges a share of about $2 billion to help get them started. The remainder of the 50 states will either have to let the U.S. run the exchanges or choose to provide services such as consumer assistance in a partnership with the federal government.

Beal, Vaughan

Nelson replaces NAIC’s acting CEO Andrew Beal, who took over the post at the end of November, when Therese Vaughan departed to revise a textbook. Beal will return to his role as the group’s chief operating officer, the NAIC said in the statement. Vaughan was CEO of the NAIC since 2009, and previously was the group’s president and the Iowa insurance commissioner.

Nelson was replaced by Deb Fischer, a Tea Party-backed Republican, in last year’s Senate election. He had opted against running for a third term, saying in December 2011 it was “time to move on.”

He was Nebraska’s governor from 1990 to 1998. Nelson previously was the state’s insurance regulator and is former CEO of the Central National Insurance Group.

As a politician, Nelson won endorsements from the National Rifle Association, the U.S. Chamber of Commerce and the National Federation of Independent Businesses.

To contact the reporters on this story: Zachary Tracer in New York at ztracer1@bloomberg.net; Alex Nussbaum in New York at anussbaum1@bloomberg.net

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net


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