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Howard Mills is the newly appointed chief advisor, global insurance industry practice, of Deloitte & Touche L.L.P. and the outgoing New York superintendent of insurance. Mr. Mills spoke recently to Business Insurance Associate Editor Rupal Parekh about his time as an insurance regulator, his views on hotly debated industry issues and what's next for him.
N.Y. tenure 'invaluable'
Q: What surprised you most about the industry when you became superintendent?
A. I became superintendent, obviously, at a time of tremendous tumult --contingent commissions, finite re, pending expiration of TRIA. It was just amazing to me how dynamic the industry was. To see it from the perspective of New York superintendent, one of the more prominent regulatory spots, was unique--to see everything just swirling around. It was a very pleasant surprise.
Q: What are you proudest of during your tenure as superintendent?
A. I'm proud of a lot of things that we've done. Internally, we enacted some reforms that were very significant. We made a switch, under my direction, from the old periodic-exam formula to risk-based exams. I think that's the wave of the future. It helps us to use our resources better but also helps us to spot problems in companies and correct them earlier.
We formed our corporate practices unit, which is a brand new unit, and that, in conjunction with risk-based exams, will enable us to spot issues where there is any criminal wrongdoing, get it to the attorney general faster and hopefully correct problems before they become full-blown crises. We've done a lot of other good things on the consumer side, processed many cases and in many instances, gotten involved on behalf of consumers.
For big-picture items, I think that the New York department was very involved--and I like to think that I was very involved--in winning the extension of TRIA. I spent a lot of time in Congress last year, testified before both the House and the Senate several times, tried to be very vocal and a thought leader, and hopefully that will carry over in the new Congress, which has been very, very responsive and very receptive to the continued federal role in a terror backstop.
Q: What's next for you professionally?
A. I'll be joining Deloitte & Touche, with the title of chief advisor, global insurance industry practice. I will be based in New York. It's a wonderful firm....They've got a very, very significant insurance practice. I was entertaining a lot of offers and...was very impressed with Deloitte--the culture of the firm, the dynamics of that role....It is a very broad portfolio...similar to being the superintendent.
Q: Did Eliot Spitzer's aggressive pursuit of wrongdoing by New York's insurers and brokers help you or hurt you as the state's top insurance regulator?
A. I think that it was a help in that I was put into a position...where we were at the center of the driving issues of the day. I didn't always agree with Attorney General Spitzer on the way he handled things, but we ultimately formed a very effective partnership, worked together very collaboratively and at the end of the day, concluded a significant number of joint settlements--which really had a fundamental impact on the industry and also on the regulatory community.
Never having been a regulator, I think was a benefit to me, and I didn't feel any need to make excuses for the past. I came in and said, 'Look, there's a reason that the attorney general is so actively involved in the insurance sector,' and part of that, regulators have to acknowledge, is that we hadn't drawn a clear enough path.
Take finite reinsurance for example: There were no clear rules that were readily understood...known. The regulatory community bears a responsibility for that, and we needed to do a better job of defining what the rules were for proper use and proper accounting of finite reinsurance, to give one example.
Q: Any advice for the next superintendent?
A. The toughest part about this job is maintaining the proper balance. On the one hand, our critical mission is to protect the insurance consumer in New York, but right behind that--and you really can't say that it's even behind it because without the second you can't do the first--is to maintain a market and an environment that's conducive to the business. So you have to maintain the balance to protect the consumer but keep the marketplace strong. I don't know if you want to call it advice, but I would say that that's the primary challenge any superintendent will face.