Hard pressed to retain out-of-state insurance company examiners,Insurance Commissioner Hanley Clark said Monday he is 'trying togrow our own' by having internal auditors become certified financialexaminers.
Clark voluntarily surrendered the state agency's accreditationwith the National Association of Insurance Commissioners last monthbecause at one point he had only one examiner. He is authorized byhis $4 million budget to hire four.
The examiners must be state Civil Service employees. Clark saidpositions had been advertised for and offers had been accepted bythree examiners. 'When it came time to show up for work they calledand rescinded their acceptance,' he said.
The examiners are responsible for doing financial examinations offive multi-state insurance companies' operations. Withoutaccreditation, some states could reject examiners' reports.
But Chief Examiner Jeffrey VanGilder, who is also director of thefinancial conditions section, said four of the five do very littlebusiness outside West Virginia. The fifth is headquartered in Ohio,but does all its business in West Virginia.
The small business is done only in Ohio and Pennsylvania. 'We areworking with those other states,' VanGilder said.
The Insurance Commission currently has three examiners and is inthe processing of hiring the fourth to give the agency a supervisorwho will go from one job site to another. The three are fromFlorida, Illinois and Pennsylvania.
Clark said he cannot hire an examiner on a consulting basis undercurrent law when he is short-staffed and hopes to get legislationintroduced in this year's legislative session to authorize the useof consultants.
When he had only one examiner, the commissioner said 'we foundourselves dealing with troubled HMOs,' including Carelink, which waslosing millions of dollars and was eventually sold to Coventry, aMaryland-based insurance company.
Clark had to make a decision whether to examine the fivecompanies or put the examiner on Carelink. He chose to monitorCarelink.
Clark said the five companies were being monitored by internalauditors from monthly and quarterly financial reports the firms hadto file. 'None of the five companies were experiencing anydifficulties financially,' he said.
'The issue is not that we do not pay enough' to the examiners,the commissioner said, noting the rate of pay is set by the Societyof Financial Examiners, a national group. The examiners make between$67,000 and $74,000 a year.
VanGilder said the daily rate is $237 for regular examinationsand $285 for examiners in charge.
West Virginia has a problem retaining examiners, he said, becausethe examiners are from other states and the agency can only pay forsix home visits a year while some other states pay for trips homeevery two weeks.
By regulation, West Virginia pays the lesser airfare and theexaminers must be on their own time when they go home.
Once the backlog of examinations is cleared, Clark said he willreapply for accreditation and believes it will be reinstated,possibly some time next summer.
The state of Washington had its accreditation suspended forsimilar reasons, and has appealed.
The five companies are The Health Plan of the Upper Ohio Valley,a money-making HMO; West Virginia Fire and Casualty Insurance Co.,which is owned by the Celina Group based in Celina, Ohio, but doesall its business in West Virginia; Appalachian Life Insurance Co.,that does 95 percent of its business in West Virginia, but is ownedby United Trust in Springfield, Ohio; Municipal Mutual Insurance,with offices in Huntington that does 50 percent of its business inthe Mountain State; and Inland Municipal Co. of Huntington.
To contact staff writer Fanny Seiler, call 348-5198.
