Insurer advice asked on laws

Redmer solicits industry's ideas for Md. streamlining

Meeting's propriety questioned

Consumer town halls planned, regulator says

May 25, 2004|By David Nitkin | David Nitkin,SUN STAFF

Maryland's top insurance regulator invited a hand-picked gathering of industry leaders yesterday to play an active role in streamlining laws that govern their business.

"We want to reduce the cost and the burden of being regulated," state Insurance Commissioner Alfred W. Redmer Jr. told a small group of insurance representatives who met with him at a downtown Baltimore law firm that specializes in insurance clients.

The meeting had been criticized by some lawmakers and groups worried about the appearance of a close relationship between Maryland's insurance chief and the companies he oversees.

FOR THE RECORD - Articles in the May 22 and May 25 editions of The Sun on an insurance industry meeting called by state insurance commissioner Alfred W. Redmer Jr. incorrectly reported the sponsorship of a 2003 campaign fund-raiser for Gov. Robert L. Ehrlich Jr., and the May 22 article contained incorrect information on the lobbying activities of a law firm. A fund-raising event scheduled for June 2003 but later canceled was organized by David M. Funk as an individual, not the firm Funk & Bolton. Additionally, while Funk & Bolton attorneys have represented CareFirst BlueCross BlueShield, and the health insurance company opposed regulatory legislation passed during the 2003 General Assembly session, firm attorneys did not lobby the governor to veto the bill. The Sun regrets the error.

The firm of Funk & Bolton played host to the gathering, and participants were selected by industry associations. While consumer groups did not take part, Redmer has said he will seek their input this summer and that his office was forming a new unit to give consumers a stronger voice.

Redmer told the group of 18 insurance executives and lawyers gathered in the firm's 12th floor conference room that he is considering alterations to laws that cover property and casualty insurance. The industry should deliver a clear and unified message on the changes they want, he said.

If he receives ideas within a month, Redmer said, he could incorporate them into legislative proposals the agency will consider for next year.

"I'd like you to do it among yourselves, so that there is consensus," Redmer said.

But because not all companies were invited to participate in the meeting, it was unclear yesterday whether such a consensus would include all views. Redmer said later that any proposals would be widely vetted.

The insurance executives and their representatives seemed to agree that the state suffers from restrictive regulations.

They singled out a part of the law that requires companies to send out lengthy notices before increasing automobile insurance rates. The notices include forms allowing motorists to appeal the increase, an option used by many customers. Company representatives said that while they usually win the appeals, they can't increase rates until challenges are resolved.

"All this time, we can't charge the premium that we asked for," said Lars B. Kristiansen, a Nationwide Insurance Co. representative. "People are gaming the system. Meanwhile, if they have three accidents, we're still on the risk."

Maryland insurance laws "are very burdensome," Meg L. Rosthal, an attorney with Erie Insurance Group, told Redmer. "It needs to be streamlined and cleaned up if it is going to do what it was intended to do."

In addition to easing regulatory burdens, Redmer said he also wanted to help bring new insurance company business into the state, and had been working with the state Department of Business and Economic Development on that effort.

He told the insurance representatives that he had hoped Gov. Robert L. Ehrlich Jr. would name him head of that department instead of to the position he now holds. Redmer is a former Republican state delegate from the Perry Hall area, and sold insurance for years.

"While I am the insurance industry regulator, at heart I am a business guy," Redmer said.

Insurance companies won't add jobs to Maryland until the state changes its business climate, said John A. Andryszak, a Funk & Bolton attorney at the meeting.

What top-ranking insurance executives who make relocation decisions hear from the underwriting people, Andryszak said, "is it is a pain in the butt to do business in Maryland."

"You don't put buildings in a place where it is difficult to do business," he said.

Yesterday's meeting reminded some critics of a fund-raising flap a year ago involving Funk & Bolton. The firm was forced to cancel a $2,000-per-person industry fund-raiser for Ehrlich, with Redmer as the featured guest, amid questions of the propriety of the regulator's appearance.

Redmer said that he plans to schedule four town hall-style meetings to hear consumer concerns, and reminded the industry executives that protecting the public is part of his mission. "Anything that is a recommendation that doesn't consider that part of it would be a problem," he said.

In an interview last week, former insurance chief Steven B. Larsen said the issue of when and how consumers would be invited to participate in the discussion over regulatory changes was "the $64,000 question."

Referring to the Funk & Bolton meeting, Larsen said: "This administration has been very visible in trying to accommodate the business community, and this is certainly consistent with the message they are trying to send."

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