BY MARK E. RUQUET
Insurance commissioners are traditionally defined by two categories—either pro-business or pro-consumer, with the former most often identified as Republicans, and the latter usually being Democrats. However, New York’s new insurance superintendent—placed in charge of a commission evaluating all financial services regulation in the Empire State—appears determined to steer a third course emphasizing pragmatism, effectiveness and efficiency.
Last week, Eric Dinallo, 43, sat down for an interview with editors from National Underwriter to discuss his regulatory philosophy as well as his broader charge in spearheading modernization of financial services oversight.
He also provided a peek into his role and that of his boss, Gov. Eliot Spitzer, in the behind-the-scenes negotiations that led to the settlement between seven insurers and Silverstein Properties of over $2 billion in lingering World Trade Center claims (see NU, May 28, as well as the accompanying story on page 14), while also addressing ongoing debates over federal versus state regulation and producer compensation.
Mr. Dinallo—named to his post in January, and confirmed by the legislature in mid-April—is best known for his work probing the financial services industry as financial crimes prosecutor under Gov. Spitzer, a Democrat, when his boss was New York’s attorney general.
Those probes into the mutual fund industry and investment banking were followed by investigations exposing the contingency fee scandal that rocked the insurance industry with charges of bid-rigging and account steering. The result was major brokerages paying billions in settlements and radically reforming their standard operating procedures.
Since 2003, Mr. Dinallo has worked on the other side of the fence, most recently joining the insurance brokerage firm Willis Group Holdings in 2006 as general counsel, where he served until his nomination earlier this year as superintendent. Before taking his Willis post, he left the AG’s office after four years as chief financial crimes prosecutor to become managing director and global head of regulatory affairs for Morgan Stanley.
In his June 11 interview at NU’s Hoboken, N.J., headquarters, Mr. Dinallo made it clear Gov. Spitzer did not have to twist his arm to convince him to take another government position.
“I love public service,” he said when asked why he left Willis. “It is often the most satisfying work I have ever done.” He added that “when the governor calls and asks you to join, it’s a huge incentive. It is hard to say no to someone you respect so much.”