Gov. Martin O'Malley said yesterday that he wants his new insurance commissioner to advocate for consumers in the face of the industry's "powerful special interests," a tactic he said was necessary to reverse a pro-industry bias that prevailed over the past four years.
The governor likened his appointment of Ralph S. Tyler to be Maryland's head insurance regulator to his efforts to remake the Public Service Commission into a more consumer-friendly body, a change Tyler helped engineer.
The governor said Tyler would "really stand up for consumers and working people in our state" in an arena in which they need the government's help.
"If you've ever had to fight for coverage you thought you'd been paying for that the company doesn't want to pay, if you've ever had the rug pulled out from under you and you find out you're no longer going to be insured when you've been paying premiums ... for years, then you know just how powerful that industry can be," O'Malley said.
The insurance administration and the PSC are agencies Republican former Gov. Robert L. Ehrlich Jr. attempted to make more pro-business.
But in contrast to the PSC, which came under intense scrutiny as a huge increase in electric rates coincided with last year's election, the Maryland Insurance Administration has remained largely out of the spotlight.
If O'Malley gets his way - and if Tyler's reputation is any guide - that will change.
"For those of you who had the pleasure of watching Ralph in action when he went to court against ... the former Public Service Commission, you know he is a fierce advocate for consumers," O'Malley said. "He will return the Maryland Insurance Administration to the proud tradition of consumer advocacy."
O'Malley, a Democrat, said he expects the insurance administration to be in the thick of the state's efforts to expand health insurance coverage.
The governor said he also is concerned about the wide disparities between the amounts people are charged for auto insurance and about insurance companies' willingness to pay claims during hurricanes and other disasters that could hurt the Chesapeake Bay region.
John A. Andryszak, a lobbyist who represents several insurance clients, said that in states in which regulators have become too zealous, they have wound up hurting the very consumers they were trying to protect.
In New Jersey, for example, auto insurance regulations were so onerous that fewer than a dozen companies were writing policies. The state overhauled its regulations, and now Geico and Progressive have entered the market, offering more choices for consumers, he said.
Andryszak said he hopes the state does not return to the climate as it was under former Gov. Parris N. Glendening, when fewer companies were introducing new products in the state.
"Reasonable regulation is what we hope for," Andryszak said. "I don't really know Mr. Tyler, but I know he is a very smart person, and I hope that's his vision along with the governor's."
The insurance commissioner is saddled with the sometimes contradictory missions of ensuring a viable insurance marketplace in the state and protecting the interests of consumers.
O'Malley and Tyler said they believe there is a need for balance but that a consumer advocate is needed now to tip the state's regulatory scales back into alignment.
"It is certainly important for there to be a mechanism for ensuring fairness in the insurance industry," Tyler said. "Given the inherent imbalance between the insurance industry as an enormous economic force and the consumer, only government can play that role in trying to establish fairness."
Tyler, 60, has been O'Malley's chief counsel since the governor was inaugurated. He served before that as city solicitor and for a time in private practice. Most of his career was in the Maryland attorney general's office.
That means he does not have any direct experience in the insurance industry, making him a curious choice for the post, said Sen. Allan H. Kittleman, the minority whip from Howard County.
"It seems to me you'd definitely want to have someone who understands the insurance industry and somebody who has dealt with insurance companies," said the Republican. "That certainly would concern me. You wouldn't want to have somebody who needs on-the-job training."
Tyler acknowledged that his only experience in the field stems from fact that insurance is often at issue in major litigation. But he said he is experienced in regulatory law and will learn the specifics of the industry as he goes.
O'Malley said it was a plus: "Having someone who is independent in that leadership position was very important to me. His independence and lack of insurance background is something I find as an asset."