A new study released today by the Washington Institute Foundation, an independent, non-profit think tank, explores the policy implications of reforming the Office of Insurance Commissioner from an elected to an appointed position. The study, titled "Washington Needs an Appointed Insurance Commissioner," concludes that making the position subject to appointment by the governor would create greater accountability and effectiveness in regulating the state's 1,350 insurance companies and HMOs and more than 48,000 licensed agents.

Insurance is one of the major financial service industries in the state. Each year the people of Washington spend more than $10 billion on insurance of all kinds to protect their homes, families and businesses from unforeseen disaster.

At present the Insurance Commissioner is chosen by direct election. Yet given the current problems in the health insurance market -- about 30 insurers have left the state in recent years, and individual health policies are now unavailable in 34 of the 39 counties -- there is a debate about whether this is the most effective way to structure our state government. In fact, some argue that in its current form the office is no more than a political stepping stone to higher elected office.

The sitting Commissioner has announced a run for the U.S. Senate. Since no incumbent will be running once the current term expires in January 2001, now is the time for the people of Washington to ask: Should the Office of Insurance Commissioner be protected from political elections by making it an appointed position?

Washington already has nine elected top officials, more than all but four other states.

Insurance Commissioner is the only state elected office that is not authorized by the constitution.

Thirty-nine of the states regulate insurance through an appointed official.

Florida voters, in a recent constitutional reform, just abolished their elected Commissioner's office and assigned insurance oversight to an appointed official.

Neighboring Oregon oversees its thriving insurance market with an appointed regulator. Oregon officials report they are "more insulated...from inappropriate pressure by interest groups" and "are not subject to self-imposed pressures...to keep their name in the public eye."

The study examines specific ways that an appointed Commissioner would strengthen oversight of insurance regulation.

1. Take campaign money out of the process of selecting the Commissioner. In the last election, the candidates for Commissioner raised and spent over $797,000, making it the third most expensive race in the state, after Governor and Superintendent of Public Instruction. Being appointed would relieve the Commissioner of the pressure to spend time fundraising and working to get "good press and lots of it."

2. Assure that skilled, experienced Commissioners are appointed. Right now there are only two legal requirements for a person to qualify for Insurance Commissioner: a) be 18 years old and; b) be a citizen of Washington. Using his appointment power, the Governor could insure that the Commissioner had the skills, knowledge and experience needed to do the job.

3. Increase accountability. The record shows that elections have not created the greatest accountability in the Insurance Commissioner's office. Of the 24 elections since the office was created, only three have resulted in a sitting Commissioner being forced from office; 87% of the time the incumbent was either re-elected or retired voluntarily. Further, in its 92 years of existence, party control of the Commissioner's office has changed hands only three times, in marked contrast to the Governor's office, which over the same period changed party control 11 times.

4. Restore public confidence. An appointed Commissioner would help alleviate the public controversy and distrust that has grown up around the office in recent years. The Insurance Commissioner has been accused of "bashing" the industry and of creating an enforcement climate that is "good for re-election, not good for consumers." Efforts to ascend to another office draws time and attention away from the Commissioner's core mission and undermines the effectiveness of the office.