A Regulator Hailed, Not Pilloried — Monday, June 22, 2009


Regulators of financial-services companies don't get much respect these days, not since some of the businesses they were supposed to oversee nearly pushed the economy over a cliff.

But state insurance regulator Don Bryan is an exception. New Jersey's longtime director of insurance in the Department of Banking and Insurance is being hailed by industry and consumer advocates alike as an unsung hero as he prepares to retire at the end of the month.

Bryan, 62, started with the department in 1982 as a drafter of regulations, after giving up a general practice law career in Mount Holly, and rose through the ranks to director of insurance in 1999. Twice he served as the department's acting commissioner, under Governors Richard Codey and Donald DiFrancesco.

In all, Bryan served under seven governors and 10 commissioners in his 27-year career. He is credited by colleagues as the behind-the-scenes orchestrator of the auto insurance reforms in 2003 that brought more competition to New Jersey and lowered rates paid by consumers.

He also played leadership roles in Prudential Financial Inc.'s complex conversion in 2001 to a publicly traded business owned by shareholders from a mutual company owned by policyholders. In addition, Bryan also was involved in the resolution in the early 1990s of the insolvency of Mutual Benefit Life.

"We didn't always agree, but we are sorry to see him leave," said Phyllis Salowe-Kaye, executive director of the consumer watchdog group New Jersey Citizen Action. "We are losing somebody with a sense of history at the department, someone who has a clear understanding of our point of view."

"Don was the man," said Magdalena Padilla, president of the Insurance Council of New Jersey. "He is extremely unbiased and fair, and always looking out for what is best for the state of New Jersey. He is uncompromising in that."

Bernard Flynn, chief executive officer of New Jersey Manufacturers Insurance Co., said Bryan's steady leadership during the transition between the DiFrancesco and James McGreevey administrations avoided a crisis in the automobile insurance market in 2001. At that time, State Farm Indemnity Co. and American International Insurance Company of New Jersey were complaining of overregulation and threatening to leave the state, and the numbers of uninsured drivers were climbing as many could not find insurance at any price.

"He kept the companies under control," Flynn said. "If not for his leadership, we would have had a complete, absolute meltdown," he said, with more and more insurers leaving and coverage becoming unavailable to ever larger numbers of drivers.

In a recent interview in Trenton, Bryan said the enactment of the auto reforms was a highlight of his career, but he downplayed his role.

"I was a participant," he said. "There were so many people involved. McGreevey was personally engaged in it.''

The problems, he said, were rooted in well-intentioned consumer protection laws that capped rates and required insurers to return excess profits to policyholders. But between 1993 and 2003, more than two dozen insurers left the state and many of the remaining companies were losing money.

With the reforms, the state started letting companies keep more of their profits as a hedge against market downturns and the department made it easier for insurers to raise rates and to withdraw from the market. The state started phasing out a law requiring that insurers serve all who apply regardless of the risk.

"It wasn't deregulation; it was a relaxation of regulations," Bryan said.

It worked out well.

In 2002, there were 62 companies writing auto insurance in New Jersey; now there are 80. Consumer auto insurance complaints are down more than 50 percent from a few years ago. With increased competition, premiums have declined for most drivers, Bryan said.

If there is a lesson, Bryan said, it is that "regulators and lawmakers should channel or direct market forces rather than fight against them."

"I think we have a real rational regulatory regime in New Jersey right now,'' he said. Auto insurers are in good financial shape and "people are able to find coverage," he said.

Bryan, a resident of Burlington Township who likes to play blackjack and collect photos of sinking ships, said he has no plans to take a job in the private sector. He said he will travel with his wife, Connie.

Bryan's boss Steven M. Goldman, the current commissioner, described Bryan as "the epitome of what a state employee can be and should be," and "someone we are quite sorry to lose."

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