'A' for state insurance agency

September 06, 1994

For Maryland's insurance administration, the school year is already over and the grades are in: straight 'A's, after posting failing marks in tests taken last fall.

It has been a remarkable turnaround -- and a necessary one.

Until Maryland was threatened with loss of national accreditation, both Gov. William Donald Schaefer and the General Assembly refused to admit there was a crisis brewing in the insurance agency. But when it finally dawned on them that 113 insurance companies with headquarters in Maryland could be forced to move to another state, reform action moved swiftly through the legislature last year.

Since then, the new insurance administrator, Dwight K. Bartlett III, has turned the agency upside down and won praise from inspectors who recently conducted a week-long examination of Maryland's regulatory operation for the National Association of Insurance Commissioners. They recommended accreditation for Maryland for the maximum five-year period -- an indication of their confidence in the revamped office to root out insurance fraud, spot financially weak insurers and protect consumers. The NAIC will vote on that recommendation at its Sept. 18 meeting in Minneapolis.

Last year, after controversial insurance commissioner John A. Donaho complained too loudly and too openly about his agency's inadequacies, the governor fired him. But the legislature decided to remove the insurance agency from the oppressive thumb of the secretary of licensing and regulation, which had been one of Mr. Donaho's earliest requests. No longer would the agency be restricted by state personnel salary scales or hiring procedures. The new administrator would have greatly enhanced powers.

That summer, Mr. Bartlett was given the job. He quickly cleaned house, bringing in an entirely new management team and CPAs and others with advanced financial skills. A new tax on insurance companies -- suggested by the insurers themselves -- was dedicated to bolstering the agency, which has meant a 35 percent increase in its budget and a staff increase of 20 percent.

Now the Maryland Insurance Administration has its independence from the state bureaucracy, modern equipment and skilled experts to regulate the insurance industry properly. Mr. Bartlett has performed his task admirably. He deserved the straight 'A's on his report card.

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