I met Ralph Nader in San Diego about a decade ago. He remarked that a major problem with Departments of Insurance is that most have a revolving door to and from the insurance companies they supposedly regulate. Nader implied that unless laws prevent insurance companies, their vendors and law firms from hiring those who supposedly regulate their activities, actual regulation that supports consumers will not exist. The practice of insurers hiring former employees of Departments of Insurance must stop in order to accomplish honest regulation without an appearance of a conflict of interest.

The revolving door is working for at least one employee of the Department of Insurance in Mississippi. Anita Lee, of the Sun Herald, recently reported that the deputy insurance commissioner who "oversaw" the Mississippi Insurance Department’s Market Conduct Study of State Farm following Hurricane Katrina has left the Mississippi Department of Insurance. Guess who hired him? The lawyers who represent State Farm in Hurricane Katrina matters.

Given this, you do not need to be a psychic to guess how well State Farm did in the Study. I noted the serious problems with the Mississippi Insurance Department study in a previous blog. In an article published in the Sun Herald, a noted consumer advocate wrote that State Farm could have written the report itself. Only legislation which prevents those regulated from hiring, directly or indirectly, those who recently regulated them can prevent this kind of conflict of interest.