Nominee as PSC chief is a fearless regulator

February 17, 2007|By Andrew A. Green | Andrew A. Green,Sun reporter

The nominee as Public Service Commission chairman would be walking into a job where millions of dollars in corporate revenues, the pocketbooks of citizens across the state and the political interests of Maryland's most powerful leaders are affected by his every decision.

It's a situation he knows well.

Gov. Martin O'Malley's nominee for the job, Steven B. Larsen, made his reputation as a fearless regulator four years ago when as Maryland insurance commissioner he rejected the conversion of CareFirst BlueCross BlueShield to a for-profit company, a deal that he argued shortchanged consumers in favor of lavish executive bonuses.

A year later as a consultant, he wrote a report on the insurance claims problems of Tropical Storm Isabel victims that helped prompt congressional action and resulted in millions of dollars in additional payments to Maryland homeowners. While in office, he investigated thousands of insurance fraud charges, returned $4 million in life insurance overcharges to Marylanders and went after insurers for late claims and other violations.

"One thing's for sure, you know he's got chutzpah," said House Speaker Michael E. Busch.

Larsen, 47, who must be confirmed by the Senate, grew up outside of Boston and earned a bachelor of arts degree in business administration from Gettysburg College and a master's degree in public policy and a law degree from Rutgers. He clerked and practiced law in New Jersey and Washington for a few years before coming to Annapolis to work for the Department of Legislative Services.

Former House Speaker Casper R. Taylor Jr., a Democrat who was chairman of the Economic Matters Committee at the time, hired him as his chief counsel and was immediately impressed.

"He's as clean as a pin and a very quick study on any complicated issue," Taylor said. "God knows he's going to have to deal with many complicated issues."

Larsen wrote health care and environmental legislation for former Gov. William Donald Schaefer for two years before taking a private-sector job as counsel to USF&G Corp., dealing primarily with homeowners and automobile insurance.

Former Gov. Parris N. Glendening hired him back to work in and eventually head his legislative office before appointing him insurance commissioner in 1997.

"I remember this conversation," Glendening said. "At the beginning of the second term, he came up to me and said, `What I'd really like to do if it came open is be insurance commissioner. I dreamed of it most of my life.'

"I said, `Steve, I don't think there's any person in America who's ever dreamed of being insurance commissioner.'"

Larsen told the governor that he loved public service and loved making the regulatory system work. He did just that, Glendening said.

Larsen is best known for holding hearings as insurance commissioner to examine the CareFirst plan to become a for-profit business and sell itself to a California company, WellPoint Health Networks Inc., a $1.37 billion deal.

Sen. E.J. Pipkin, an Eastern Shore Republican who sits on the committee that handles insurance and utility issues, said the lesson of the CareFirst hearings is not that Larsen is rabidly pro-consumer but that he is thorough and fair.

"He let the facts lead to the conclusions and not the other way around," Pipkin said.

Larsen was not reappointed by Gov. Robert L. Ehrlich Jr., a Republican, when his term expired in 2003. He went to work for the Baltimore office of Saul Ewing, a large law firm, handling insurance and health care law.

But he didn't stay out of the public eye for long.

In the fall of 2003, Tropical Storm Isabel destroyed hundreds of homes in eastern Baltimore County and Anne Arundel County. After hearing dozens of residents complaining about paltry flood insurance settlements, Baltimore County Executive James T. Smith Jr. hired Larsen to investigate.

"Without Steve Larsen, we would not have been able to secure the relief that so many people in eastern Baltimore County needed," Smith said. "Many people in eastern Baltimore County ended up with two and three times the amount of compensation for damages that they had previously been told they would get."

In June 2004, Larsen became the president and chief executive officer of Amerigroup Maryland Inc., a health care company with 140,000 Medicaid members in the state. He is also an executive vice president of the national parent company.

People who know him say that means he's probably cutting his salary in half, if not more, to take a $117,000-a-year job as PSC chairman.

While he might not have spent years dreaming about becoming PSC chairman, he was clearly excited about it yesterday. He brought his family with him to stand by the governor when his appointment was announced, and he asked his older son, Aidan, to record the news conference on a digital camera.

"There's a lot of work to do, no doubt about it," Larsen said. "But we will do it and do it well."

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