Md. insurance regulator vows agency will improve Accreditation within reach, legislators told

September 08, 1993|By David Conn | David Conn,Staff Writer

ANNAPOLIS -- Maryland's insurance regulatory agency, which was sharply criticized by a national regulatory group last month, has started to mend itself and will be ready for a crucial evaluation next year, legislators were told yesterday.

Maryland Insurance Administrator Dwight K. Bartlett III assured a House committee that he would improve his agency's performance enough to satisfy the National Association of Insurance Commissioners when its accrediting committee meets in Baltimore in June.

"This is going to take a fair amount of work, and it would probably not be possible to have the [NAIC] team come back and review us for accreditation before the end of the year," Mr. Bartlett testified before the House Economic Matters Committee.

But "I am quite confident that we will be ready to be reviewed by the June meeting of the NAIC [examiners]," he said.

After Jan. 1, the NAIC's approval is needed before other accredited states will accept company examinations conducted by Maryland regulators, who have primary oversight of the 113 insurers based here. Without that accreditation, some states could eventually forbid a Maryland-based insurer to do business there.

But in the short term, the NAIC will assign auditors from accredited states to join in Maryland's examinations of its

domestic insurers.

"The consequences [of not gaining accreditation now], in my view, really don't exist," Mr. Bartlett said.

Still, the insurance administration is working to improve a performance that the NAIC said was severely lacking, according to a draft report from its accreditation team produced last month.

That report said the administration's analysts and examiners needed training in most basics of insurance regulation. It said the department did inadequate analyses of insurers' financial health and failed to pursue problems they did detect.

"They felt that in the department there was a good deal of paper shuffling going on," Mr. Bartlett told lawmakers yesterday. "But we're not adequately interpreting the results of these procedures and not doing much follow-up."

Since he took over in early June, Mr. Bartlett said, he has been replacing the entire top management team, a job that would be finished by the end of this month.

The newest addition to the team will be Ilona Klasons, a veteran chief actuary who left the regulatory agency last year. Ms. Klasons will become associate commissioner for financial examination and analysis.

Mr. Bartlett said he has met with insurance company chief executive officers to assure them that accreditation will come next year. He also told the committee that aside from a supplemental budget request this winter, and some minor changes to the law, he would have all the tools and resources he needs from the General Assembly for accreditation.

If that doesn't happen, he said, "I'm clearly the one to blame."

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