Update 7:35 a.m.:
Longtime state Superintendent of Insurance John Franchini has dropped out of the running for a new four year term, said Diane Denish, chair of the selection committee, this morning.
That means New Mexico will have a new chief insurance regulator after Franchini’s term expires Dec.31.
Denish’s committee, called the Insurance Superintendent Nominating Committee, is to begin interviews Saturday in Albuquerque with eight other candidates. Franchini has served in the job since 2010.
Denish said another candidate, Quinn Lopez, has also has withdrawn.
From the paper:
Copyright © 2019 Albuquerque Journal
On Saturday, the New Mexico Insurance Nominating Committee is scheduled to interview the candidates, seek public comment, go into executive session to discuss the candidates, and then take a vote in public to select a new superintendent.
The meeting, which begins at 9 a.m., will be held at the State Bar of New Mexico, 5121 Masthead St. NE.
The superintendent selected will start a four-year term beginning Jan. 1, 2020.
From prepaid funerals to warranty agreements, the oversight of a vast array of insurance products purchased by New Mexicans falls squarely under the purview of a single appointed public official, whose term ends Dec. 31.
And on Saturday, a nine-person nominating commission is expected to decide whether the current Superintendent of Insurance, John Franchini, remains in office. Or whether new blood, or new direction, is needed.
Ten candidates, including the sometimes controversial Franchini, will be interviewed, beginning after 9 a.m. at the State Bar of New Mexico offices in Albuquerque, with public comment to follow. By the end of the day, the commission is scheduled to make a selection.
“The Office of the Superintendent regulates every person and business involved in providing insurance in New Mexico,” said Diane Denish, former Lt. Gov. and chair of the nominating commission. “The Superintendent is the head of the office that has the responsibility of protecting consumers through smart regulation and enforcement. As consumers we want our insurance company to be there for us in the future when something like declining health, car accidents, home burglary or damage to our property happens.”
The superintendent, she said, is responsible for monitoring the fiscal soundness of insurance companies and encouraging insurance access and availability for New Mexicans through premium rate approvals and monitoring. The office also regulates the behavior of insurance agents and claims handlers.
Moreover, she added, “It is critical to have a robust complaint process available to consumers and others to ensure that those who are allowed to be in the insurance business by the Office’s licensing processes act professionally and responsibly.”
In fiscal year 2018, for example, the office received 394 complaints, saving or recovering nearly $2.7 million, according to its most recent annual report.
Franchini, who is seeking a third four-year term, has touted his accomplishments, such as nearly doubling the office’s revenue from 2013 to 2018. His agency also sought an in-depth financial audit in 2016, which revealed 31 negative findings. Last year, the audit findings dropped to eight.
But since his last appointment in 2016, which was unanimous, Franchini has been embroiled in several controversies including:
• The failure to collect nearly $65 million in premium taxes owed by health insurance companies, after a special audit in 2017.
That controversy led a former employee of the Office of Superintendent of Insurance to file a lawsuit this summer, claiming she was retaliated against after exposing the tax underpayments by insurance companies. Shawna Maestas, a former financial audit bureau chief with the agency, claims she was threatened with arrest and criminal prosecution for reporting suspected fraud and underpayments to the state Attorney General’s office.
In another pending case, a former attorney in the regulatory agency sued Franchini, his deputy and the OSI in 2018, alleging discrimination and a hostile work environment.
• A legal battle stemming from a 2017 lawsuit filed by current and former New Mexico Medical Society presidents. The lawsuit alleges the superintendent secretly decided to allow New Mexico’s largest hospital chains and outpatient facilities to tap into the state’s Patient’s Compensation Fund to pay malpractice liabilities. And in doing so, they contend, he failed to comply with the law.
The fund reimburses patients for medical malpractice judgments exceeding $200,000 and up to the $600,000 personal liability malpractice state cap.
The plaintiffs contend that adding new types of medical entities “overburden(ed) an already actuarially unsound fund” by bringing with them an inordinate amount of risk.
OSI argued that its administration of the fund was lawful and a state district judge ruled that “no specific action of the Superintendent was wrong.”
However, the judge found that Franchini should have followed a state law beginning in 2013 that the superintendent write and publish rules describing how he determines whether an entity is qualified for the fund.
The case is on appeal.
Franchini earlier this year touted newly passed legislation, to go into effect next year, that addressed so-called “surprise billing” by out-of-network health providers who bill patients for any portion of charges that aren’t covered by a health insurance plan.
Patients either have no choice but to use such providers, such as in emergencies, or are unaware that they are being treated by a provider who isn’t in their insurance network, such as anesthesiologists, radiologists, and pathologists.
Franchini earns $120,931 a year and has served as superintendent since 2010. The nominating commission has voted to increase the salary to $156,000 – but that decision awaits approval of the state Department of Finance and Administration.
The nominating committee includes four members appointed by the governor and four by legislators.
On Nov. 4, the eight selected Denish to serve as the ninth member and chairwoman.
Other committee members are: Allegra Carpenter, Geoffrey Romero, Douglas Perkins, Patricia Greene Williams, Jennifer Ford, David Hunton, Scott Yurcic and Benny Hodges.