Washington’s Insurance Commissioner wants to notify consumers if their insurance company is on the verge of bankruptcy. But Democrat Mike Kreidler says lobbying by health insurance giant Premera Blue Cross has “gutted” his consumer protection measure in the Washington Legislature.
After the collapse of AIG in 2008, the National Association of Insurance Commissioners developed something called the Holding Company Act. It basically gives state regulators additional oversight of insurance carriers that are held by a parent company.
Washington Insurance Commissioner Mike Kreidler says the legislation would make it easier to detect a brewing financial crisis and warn consumers.
“The fear is that you could have an insurance company that really runs a Ponzi-type scheme that is moving money from one subsidiary to another to try to avoid regulators identifying the seriousness of the problem,” he said.
Kreidler’s measure passed in the Washington House, but was largely rewritten in the state Senate after lobbying by Premera Blue Cross.
Kreidler maintains the new language will prevent him from releasing information if a financial exam of a holding company turns up trouble.
Premera Blue Cross, in response, said it supports Kreidler’s measure but wanted technical changes made to protect “sensitive and proprietary information.” So far more than 20 states including Oregon and Idaho have adopted some version of an Insurance Holding Company Act.
Kreidler says Washington has until 2016 to comply with these national standards or his office could lose accreditation. However, the Democrat says he will not support the Senate version of the measure. If it passes the full Senate, it will return to the Washington House where its future is uncertain.
