After more than 10 years reporting on this industry, I finally got an opportunity this summer to cover a meeting of the National Association of Insurance Commissioners.

Many of the stories I've heard about NAIC meetings painted two unflattering portraits.

Some viewed the exercise as hours of droning bureaucratic conversation, while others described the get together of insurance regulators as a pageant for career opportunists whose primary interest is the next step in their political lives, or going through the revolving door to secure a well-paying position in the private sector.

Things do get done, but never quickly, and to paraphrase one keen observer, politics is like making sausages–it is not something you want to see being done.

For my own part, the NAIC conference I witnessed in Seattle reminded me of my days as a stringer for a local newspaper covering municipal meetings. It's just that the topics they discussed were a bit more complicated.

Despite my opinion being colored by negativity, I grew to respect this group of regulators from 50 states and five American jurisdictions. I encountered a meeting populated by thoughtful and dedicated administrators trying to establish some uniformity in overseeing a very complex and demanding industry that is often maligned and misunderstood by the general public.

(Insurers bear a good part of the blame for their poor reputation, but that's another column).

Back in my days as a stringer, I walked into a municipal or planning board meeting and had to ferret out a story from the proceedings. Those gatherings were often long, meandering processes of democratic consensus building, except for the ones that turned into partisan bickering. They made great copy but never accomplished anything for the people that particular government body represented.

Unlike the bickering I remember at some of those meetings long ago, the disagreements I witnessed at the NAIC conference were intelligent and reasoned but lacked any emotion.

During the first meeting of the Retained Asset Account working group–which is charged with studying the controversial life insurance program that is designed to allow beneficiaries the choice of either receiving a lump sum payment or keeping the money in a savings account operated by the insurance company–there was a moment of pointed disagreement.

Rhode Island State Representative Brian Patrick Kennedy, substituting for National Conference of Insurance Legislators' President Robert Damron (a state representative from Kentucky), told regulators that NCOIL was considering adopting a model law to protect consumers and regulate such accounts at the state level. He said NCOIL was making the move to stave-off federal action.

That brought a strong rebuke from Connecticut Insurance Commissioner Thomas R. Sullivan, task force co-chair, who disagreed with the states taking such an action before the committee completed its work. Mr. Kennedy's rebuttal was that the state legislators need to act before federal legislators usurped the state's authority in regulating insurance.

Then there was the pointed exchange between Commissioner Sullivan and Illinois Insurance Director Michael T. McRaith over the benefits of health care reform. Mr. Sullivan called the reforms "intrusive" and worried that it would do damage in his state, where, he noted, there is ample competition among insures.

Mr. McRaith could not have disagreed more with Mr. Sullivan, noting that in Illinois there is a serious lack of competition, adding that he welcomed the federal reform act.

These were thoughtful people discussing important matters in calm, intelligent ways divorced from the usual polemics that have come to color so much of today's political discourse–including the halls of Congress.

What makes the NAIC unique is that it is a group of individuals representing vastly diverse views, making decisions that affect millions of people and billions of dollars in capital, with the purpose of developing a consensus for action nationwide in what is, after all, still a state-regulated business.

Thanks to the federal financial services reform law passed earlier this year, we will have a Federal Office of Insurance. Right now the office is designed only to collect information and represent U.S. insurance interests on the international stage. But it has its limits, governed by the interests or veto power of the Treasury Department in which it is housed.

The reality is that the current patchwork system of what passes for national insurance regulation is a prolonged process that requires able, knowledgeable people. And despite the revolving door on state commissioners, at least there appears to be a capable bureaucracy in place to step in where the leadership is either absent or unfamiliar with the intricacies of the insurance industry's diverse issues.

The NAIC needs committed and knowledgeable leadership for the long term. That brings up the age-old question, should regulators be appointed or elected?

Less than a quarter of the regulators are elected. The longest-serving insurance commissioner, John W. Oxendine of Georgia, was elected insurance commissioner in 1994. Maybe it's a stretch, but that would seem to indicate when you want longevity, elected officials would provide it.

Indeed, running a campaign, raising money and shaking hands with voters most likely means a commitment to the office for more than a year or two. After all that work, you would think most individuals would not be in a hurry to relinquish the office.

A few may argue that electing a commissioner opens the door to all the influence insurance carriers' money can buy.

I suggest a simple answer to that. Require all companies, agents, brokers and associations writing business in the state and wanting to contribute to the campaign of an insurance commissioner to place their contribution into a blind election fund for candidates. Monetarily, everyone has equal influence by having no influence and it would be completely transparent.

Insurance reform combined with election reform. Maybe this could be the start of something big?

Mark E. Ruquet is an Associate Editor who covers the producer beat, as well as regulatory topics. To respond to his column, you may reach him at [email protected]