New York Insurance Superintendent Eric Dinallo crossed the Hudson to visit with NU's editors in our Hoboken office this past Monday to lay out his vision for supervising this industry as well as modernizing the broader financial services sector. You can read all about it by clicking here. However, the new commish also set me straight about his role--and that of his former and current boss, Gov. Eliot Spitzer--in settling $2 billion in leftover World Trade Center claims.
In my blog entry of May 23, headlined "Spitzer Does It Again," I speculated that the governor "apparently knocked some heads together" among the seven insuers involved and their policyholder--Silverstein Properties--to get a deal done.
A statement from Gov. Spitzer's office reported that "when several outstanding issues remained unresolved, Gov. Spitzer became personally engaged in the negotiations." To which I added: "That's when the head-knocking began. You don't want to mess with Eliot Spitzer."
But Mr. Dinallo, during his candid interview here, emphasized that rather than twist arms or bully anyone, Gov. Spitzer lent his considerable analytical skills to the effort, helping resolve a few of the more difficult issues while offering creative ideas to close some of the remaining gaps.
As reported by our own Mark Ruquet, Mr. Dinallo noted that Gov. Spitzer conducted three meetings, countless phone conversations and additional presentations, shocking the parties with his knowledge and involvement in the details while making it clear he wanted a resolution in everyone’s best interest.
It was the fresh perspective provided by Gov. Spitzer, not his political muscle, Mr. Dinallo insisted, that made the difference.
Thus, I stand (or, more accurately, sit) corrected.
Mr. Dinallo also should be credited for getting the battling parties--a group which he feared had become a "dysfunctional family"--to sit down and talk in the first place. A key concession won during these behind-the-scenes negotiations was convincing Silverstein to drop demands for compensatory interest on the judgment, which would have added up to a considerable amount.
This massive deal really got Mr. Dinallo and his action-oriented governor off to a good start. Now the new superintendent takes on modernization of the state's entire financial services sector.
At first blush, the state appears to be in very good hands.
For more on Mr. Dinallo, click here.
Comments (1)
As an alumnus of the New York Insurance Department, I was pleased to read of Superintendent Dinallo's plans to review and modernize the department's regulations.
However, I was dismayed by Associate Editor Mark Ruquet's observation in his magazine article that "in past years some might have viewed the job of insurance superintendent as a backwater appointment."
It is difficult to understand how any knowledgeable person could view the leadership of the most important insurance department in the nation as a "backwater" position.
Over the years, the New York Department pioneered and set the standard for quality regulation.
Under such giants as Superintendents Dick Stewart and Bob Dineen, New York led the way in innovative regulation of the insurance business in New York, in setting an example for the other states, and in restructuring the National Association of Insurance Commissioners.
The lasting role played in insurance regulation nationwide by the career staff of the New York Department, including such legendary bureau chiefs as Bill Gould and Julius Sackman, who also were major forces in the development of model NAIC legislation, cannot be underestimated.
There is always room for improvement, but If Superintendent Dinallo steers a "course emphasizing pragmatism, effectiveness and efficiency," he not only will be regulating in the best sense of the word, but he also will be building on the qualities that made the New York Insurance Department the standard by which insurance regulation has been measured.
George K. Bernstein
Former Deputy Superintendent and General Counsel, 1964-1967,
and First Deputy Superintendent, 1967-1969
Posted by George K. Bernstein | July 9, 2007 3:45 PM
Posted on July 9, 2007 15:45