Insurance chief departing Bartlett doesn't expect to complete action on Blue Cross merger

February 13, 1997|By M. William Salganik | M. William Salganik,SUN STAFF

State Insurance Commissioner Dwight K. Bartlett III said yesterday that he would leave office when his four-year term expires in May, and that he did not expect to complete action on a proposed Blue Cross merger before he went.

His announcement came at a briefing before the House Economic Matters Committee on the proposal by Blue Cross Blue Shield of Maryland and its District of Columbia counterpart to combine operations.

"I am not primarily a public servant," he said after the hearing, "and I want to go back to the private sector."

Bartlett said the proposal to create a new nonprofit holding company to operate the two Blue Cross plans represents "a unique structure" and the Insurance Administration needed to "take the necessary time to do it right."

He also said he would be speaking with insurance commissioners in Virginia and the District of Columbia to see how they might be able to coordinate the review process.

Bartlett said he expected to receive more detailed information from the Blue Cross plans in a few weeks and wanted thereafter to hire a financial adviser to review the consolidation, a study that he thinks could take another month or two.

Also, he said, he plans to hold a public hearing after the consultant reports, and might need time to review issues raised at that hearing.

William L. Jews, president and chief executive officer of Maryland Blue Cross, said at the hearing that Bartlett's departure was "very troubling relative to the process" of reviewing the consolidation."

"To drag this on would cost the citizens money," Jews said. "It's troubling that we could get 90 days into the process and have to start the whole process over again."

Larry C. Glasscock, president and chief executive officer of Blue Cross Blue Shield of the National Capital Area, said a delay could mean "opportunity costs" for the two Blue Cross plans, which are hoping to save money and attract more subscribers by consolidating.

Gov. Parris N. Glendening will attempt to name a new insurance commissioner in time to have the replacement on board before Bartlett leaves, said John W. Frece, a spokesman for the governor.

The governor's staff is beginning to compile a list of candidates, Frece said.

"The governor has been very pleased with his [Bartlett's] performance as commissioner," Frece said.

When Bartlett took the job in 1993, state regulation of insurance had been criticized as weak.

A study that year by the National Association of Insurance Commissioners (NAIC), criticized a "laxity" of oversight that "encourages a company to take liberties with the [legal] requirements."

The state reorganized the agency, gave it a larger budget and allowed flexibility in civil service requirements so Bartlett could hire professional staff more easily. Within about a year, Bartlett had improved operations to the point that the Insurance Administration won full accreditation from NAIC.

"He's blended industry background and experience with a government agency," said William F. Simmons, president of Group Benefits Administrators, an insurance administration firm in Lutherville.

The Insurance Administration under Bartlett "had better organization than I've ever seen, and I've been in the business 30 years. He protects the public, and he's fair with the industry."

Bartlett has had some critics, particularly over a recent change that loosened rate regulation of homeowners' and auto insurers. Some sharp premium increases followed.

Sen. George W. Della Jr. said yesterday that Bartlett was honest and knowledgeable, but had not been aggressive enough in protecting consumers. "Whether it is accurate or not, the public perception is that the Maryland Insurance Administration is there to serve industry," the Baltimore Democrat said.

Bartlett, who is 66, said he will resume consulting after he leaves the $91,000-a-year post May 1.

His first project, he said, would be as a volunteer adviser to the government of Egypt, which is privatizing its insurance industry.

Pub Date: 2/13/97

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