I am writing today to announce the closure of the New Mexico Independent. After three and a half years of operation in New Mexico, the board of the American Independent News Network, has decided to shift publication of its news…
While environmental activists played their part yesterday during demonstrations at the capitol building, going so far as to dress up as solar panels and to sing the tune of “You Are My Sunshine,” their counterparts, the anti-cap-and-trade contingency who has…
Roughly one quarter of University of New Mexico students are unimpressed with the state’s flagship public school, according to a survey that questioned college students about their higher education experiences.
New Mexico is getting a federal grant to help beef up consumer protection efforts. The money will be used to help consumers file complaints and to appeal insurance company decisions, track and analyze trends in those complaints, and to fund a full-time staff position to assist consumers who are seeking health insurance coverage,
The state Division of Insurance will not publicly disclose a corrective action plan prepared in response to a scathing audit that slammed Division oversight of the insurance industry, according to an e-mailed Division response to The Independent’s Inspection…
Legislators have drafted a constitutional amendment and companion legislation that would abolish the controversial Public Regulation Commission (PRC), New Mexico’s most powerful regulatory agency. The move came as a surprise to commissioners.
Sharp divisions surfaced on renewable energy and insurance rate regulation between Public Regulation Commission (PRC) candidates at an industry-sponsored candidates’ forum Wednesday, with District 4 Republican candidate Gary Montoya defending the use of coal-burning power plants while his opponent, Democrat Theresa Becenti-Aguilar, advocated more use of solar power.
State Insurance Superintendent John Franchini has said he plans to meet individually with members of the Public Regulation Commission to discuss how the division plans to fix serious problems pointed out in a recent national audit. “They may think they’ve figured out a ‘loophole’ [in the Open Meetings Act], but they’ll lose the public’s trust and confidence in the process. So what have you really gained?” says Sarah Welsh of the Foundation for Open Government.
Stephanie DuBois has worked as a dog trainer, bookkeeper and waitress, and managed the Deming Chamber of Commerce for three years. Outgoing Land Commissioner Pat Lyons is a former legislator who has overseen the state Land Office for the past eight years. The two are competing for a seat on New Mexico’s most powerful regulatory agency, the Public Regulation Commission. And each has a different vision on how the agency should be run.
Public Regulation Commission (PRC) Commissioner Sandy Jones’s quest to identify and fire the employee he believed leaked an audit report that was published Friday by The Independent is legally dubious, according to New Mexico…
The Public Regulation Commission (PRC)’s Tuesday meeting erupted into a heated debate overa national auditors’ report that was sharply critical of the agency’s Division of Insurance. Although the report was released after a public records request, the agency announced that a new, more restrictive PRC-wide policy about employee contact with news reporters is being drafted.
The Public Regulation Commission doesn’t want to have a public discussion of a critical audit of the state Division of Insurance, PRC Commissioner Jason Marks charged Tuesday.
“They’re trying to cover it all up and keep it from…
Auditors for a national accrediting organization reviewing the New Mexico Division of Insurance this spring found an inexperienced, marginally trained staff often incapable of performing in-depth analysis of insurance filings, according to a June 24 draft report obtained by The Independent.
The auditors from the National Association of Insurance Commissioners (NAIC) also were sharply critical of how New Mexico regulators have overseen the insurance industry, the report shows.
The findings resulted from visits NAIC auditors paid to the New Mexico insurance division this spring as part of a regular every-five-year re-accreditation process for state insurance regulation agencies.
New Mexico’s insurance division won accreditation in August, but auditors placed the division on “probationary status” pending completion of a corrective action plan to address problems identified during their visits to Santa Fe, Superintendent of Insurance John Franchini acknowledged Thursday.
According to the report obtained by The Independent, auditors found:
The auditors also noted that the division’s financial analysts frequently resorted to surface-level reporting without analyzing underlying factors, when reviewing insurance filings. Their reports frequently identified what happened, but not why, the report states.
The division’s financial surveillance staff suffered significant turnover during the past two years, the NAIC auditors also noted.
The auditors recommended the division provide ongoing training to its financial analysts in, among other things, insurance operations, reinsurance, reserves and other areas to bulk up their expertise in reviewing insurance company filings.
Finding echoes earlier warning
The NAIC’s finding that Division reviews of documents submitted by insurance companies are insufficient appears consistent with similar assessments by an independent insurance rates expert hired by the state Attorney General’s office to review a controversial Blue Cross Blue Shield N.M. rate hike earlier this year.
The draft report did not focus just on insufficiencies, although that appears to have dominated the report. NAIC auditors noted areas of improvement at the division.
The division’s new chief examiner, hired in 2009, had provided “significant oversight,” auditors found. But financial examinations of insurance companies conducted by division contractors prior to the new chief examiner’s arrival frequently contained “no evidence of any involvement by division personnel on the examination.”
Commission might review report in secret
The Public Regulation Commission (PRC), which oversees the insurance division, had scheduled Franchini to present the corrective action plan to commissioners Tuesday. But that presentation was rescheduled for Thursday.
Division officials had learned Tuesday morning that The Independent had obtained a copy of the NAIC report.
At Thursday morning’s public Commission meeting, Franchini asked commissioners for a second delay, saying the corrective action plan would be ready next week. He also suggested the PRC allow him to present the NAIC auditors’ findings and the division’s response in a secret, closed-session meeting, alluding to sensitive personnel matters supposedly discussed in the reports.
But the June 24 version of the NAIC report obtained by The Independent doesn’t name any employees or even specify division staff positions, other than to compliment the division’s chief examiner for improving oversight issues.
“The law is clear,” N.M. Foundation for Open Government director Sarah Welsh told The Independent Thursday. “They can only go behind closed doors to discuss personnel actions, complaints or charges ‘against any individual public employee.’ That means actual people, with names. If they’re discussing some larger departmental issue and they realize they need to fire the department head, fine, they can go talk about that in closed session. But they should specify which limited personnel matter they’re talking about, whether it’s hiring, demotion, dismissal or the investigation of specific charges against a specific person.”
Commissioners Sandy Jones, David King and Jerome Block, Jr., voiced support for a closed-door discussion of the report.
Commissioners Jason Marks and Theresa Becenti-Aguilar both questioned the need for secrecy. But they appeared outnumbered.
“It’s already been on the agenda (for Tuesday), and has to be discussed publicly,” Becenti-Aguilar said. “This is our new way of open communication and transparency.”
Becenti-Aguilar and PRC Chief of Staff Michael Rivera both took Franchini to task for failing to communicate with commissioners and for delays in the division’s preparation of the corrective action plan, which was originally due this week.
“When we have a deadline from an oversight agency like this, we need to make much effort to meet those deadlines,” said Rivera. “It has been about three weeks since we received notification (from NAIC) and we’ve asked (the NAIC) for an additional week to respond. Mr. Franchini has assured me we will get this done. Part of the reason for the delay was I found out the commissioners were unaware of the situation.”
‘No attempt to hide anything’
Franchini said he had not intentionally kept the audit findings from commissioners.
“There was never an attempt to hide anything – that wasn’t my intent,” Franchini told commissioners. “I’m new at this stuff, just getting my feet wet. But we almost have that plan complete. We’d like to present that to you at a closed hearing. We can do that early next week.”
Commissioners expressed concern to The Independent in July regarding Franchini’s ability to lead the Division. But only Marks voted against Franchini’s appointment.
Jones suggested staffers should have stayed in Santa Fe to continue preparing the corrective action plan rather than take an August trip to the NAIC annual meeting in Seattle, Washington.
“Maybe they shouldn’t have gone to Seattle,” Jones said.
But the purpose of the Seattle trip was for division employees to seek re-accreditation before the NAIC Financial Regulation Standards and Accreditation Committee, staff have said.
Jones acknowledged that he had had the opportunity to read the NAIC report, but had not done so.
“I was offered a copy and said I didn’t want it,” Jones said. He did not elaborate.
The Independent filed a public records request Aug. 17 to inspect all division correspondence with the NAIC. However, the Division has not yet disclosed the final NAIC report and probationary status notice letter, or other related documents.
Asked if the Division’s probationary status was unusual, Franchini could name no other states currently on probation with the NAIC. But two other states, Nevada and New York, had been through the probationary process in recent years, Franchini said.
In the New York case, the problems had to do with insurance regulators’ statutory power, rather than under-staffing or lax oversight, Franchini acknowledged.
NAIC officials could not be reached for comment Thursday.
New Mexico Independent’s previous reporting on this issue:
‘Typo’ was cited as support for Blue Cross N.M. rate hike
Insurance Division approved Blue Cross rate hike without documentation of claimed losses: Regulators are ‘insufficiently skeptical’
‘Musical chairs’ at state Insurance Division: Blue Cross rate hike fight claims three superintendents in two months
Fired Insurance Division compliance director’s lawsuit alleges illegal, improper conduct at PRC
Fireworks over Blue Cross Blue Shield NM rate hike settlement
Blue Cross and Blue Shield of New Mexico attorney Paul Bardacke spent much of his time at last week’s Division of Insurance hearing on his client’s latest health insurance rate hike attacking Allan Schwartz, the Attorney General’s office’s independent expert who testified…
A contentious all-day hearing Wednesday left many Blue Cross and Blue Shield of New Mexico customers saying they see little hope for relief from a controversial 21.3 percent increase in their health insurance premiums. Even though the company’s cash reserves have now reached $7.2 billion, an expert witness for the Attorney General’s office’s, who reiterated earlier testimony that Blue Cross had not sufficiently documented its claimed cost figures, and whose analysis found the insurer’s rate filing had exaggerated company losses, said the 21 percent increase was “reasonable, given the circumstances.”
Controversy has surrounded the state’s approval of a 21.3 percent rate hike on 40,000 Blue Cross and Blue Shield of New Mexico health insurance policyholders, but the state Division of Insurance approved Presbyterian Insurance Company’s even larger, 24 percent health…
The Public Regulation Commission (PRC)’s Division of Insurance will hold a public hearing Wednesday in Santa Fe on Blue Cross and Blue Shield of New Mexico‘s controversial health insurance rate hike.
Blue Cross will be asked…
Since December 2008 A.V. Ley has experienced two double-digit increases to the monthly health care premiums he pays Blue Cross Blue Shield of New Mexico, he says. So when the retired engineer learned Monday that New Mexico had won a $1 million federal grant to strengthen how New Mexico vets health insurers’ rate-hike requests, he cheered. New Mexico was one of 45 states to win $1 million Monday to help beef up how it reviews rate-hike requests by health insurers. U.S. Health and Human Services (HHS) Secretary Kathleen Sebelius on a conference call with reporters Monday characterized the money as a way to “restore some basic fairness” for consumers who find themselves battling a perennial rise in the cost of health care.
In light of public outrage over a controversial 21 percent increase in Blue Cross Blue Shield’s health insurance premiums — and revelations the increase may have been based partly on exaggerated losses — the New Mexico Division of Insurance is moving to require insurers to submit more information, including rate histories, when filing new rates.
The Public Regulatory Commission (PRC) rebuffed proposals from legislators that would dismember the controversy-plagued agency, moving its Division of Insurance, Transportation Bureau and other regulatory programs to other agencies.
“We’re a young agency and we’re sorting out some…
Thursday on the KUNM evening news, The Independent’s Bryant Furlow discussed the efforts of Blue Cross and Blue Shield of New Mexico to raise rates on individual policy holders in the state. The state Supreme Court ruled this week…
New hearings on an insurance company rate hike will continue after The New Mexico Supreme Court decided on Wednesday to deny Blue Cross and Blue Shield of New Mexico‘s petition to stop them.
The company had asked the court to halt new Insurance Division hearings to review a previously-approved but controversial health insurance rate hike.
“This paves the way for the public vetting of the factors underlying the rate increase,” Public Regulation Commission (PRC) Commissioner Jason Marks told The Independent at the Supreme Court. “The public can’t help but benefit from hearings.”
Blue Cross Blue Shield NM had petitioned the Supreme Court to reverse acting superintendent Johnny Montoya‘s order suspending the rate hike
After hearing oral arguments from Blue Cross attorney Paul Bardacke, Attorney General Gary King and Insurance Division attorney David Barton, justices retired to chambers for approximately 25 minutes Wednesday morning. They briefly emerged for Justice Petra Jimenez Maes to announce the court was denying the company’s petition.
Insurers should not be subject to repeated hearings after a rate hike has been approved by the insurance superintendent, Bardacke argued.
“Where is the finality for consumers, first of all?” he asked in oral arguments before the court.
But the Supreme Court was not the appropriate venue for the case, Maes stated Wednesday morning, echoing Barton’s oral argument that the high court’s intervention would only be appropriate if Blue Cross had no other recourse to appeal the Division’s decision. Under state law, Blue Cross can appeal a withdrawal of any rate hike approval in district court.
“We respect the finding of the Court and will be at the hearing August 25,” Bardacke, who represents Blue Cross Blue Shield NM, told The Independent. “We were pleased Attorney General Gary King indicated the (rate hike) settlement was fair and equitable, and in the best interest of all New Mexicans.”
The Attorney General’s office had helped negotiate and stood by the controversial rate hike settlement, but Gary King appeared before the Supreme Court to defend the Insurance Superintendent’s authority to hold public hearings and review the justification for the rate hike.
The Insurance Superintendent has discretion under state law to hold the scheduled hearings, Gary King argued.
“A final order reversing approval would not be discretionary,” Gary King clarified to The Independent after the Court’s decision. “There would have to be some reason for rejecting the rate increase. There would have to be some different or additional evidence presented at the hearing” to reverse the rate hike approval.
“It’s a new day for consumers in New Mexico,” PRC chair David King told The Independent, adding that Legislature should now empower the PRC to hear appeals of future rate hikes. Currently, appeals must be filed in district court.
“I’m happy New Mexicans will get a chance for new hearings and we’ll do things now that should have been done orginally,” PRC Commissioner Jerome Block Jr. said. “Hopefully the surpluses prove that the rate increases are not justified and New Mexicans can be spared this increase. They have a lot of nerve to come ask for an increase, frankly.”
The Public Regulation Commission (PRC) voted 4-to-1 Tuesday afternoon to appoint John G. Franchini as the state’s newest superintendent of insurance. Commissioner Jason Marks cast the dissenting vote.
Franchini has worked in the insurance industry for more than 35 years, since he joined his father’s insurance brokerage as a salesman, according to a letter to commissioners that accompanied his resume. He worked as vice president for government affairs at New Mexico Mutual, the state’s workers’ compensation underwriter, from 2002 until January 2010, according to his resume.
Franchini was appointed one day before the state Supreme Court is scheduled to hear a Blue Cross Blue Shield NM petition to reverse acting superintendent Johnny Montoya‘s order suspending the rate hike. More …
