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Redmer resigns after 2 years
State's insurance agency chief takes job leading regional HMO
 
By Andrew A. Green
Sun reporter

October 12, 2005

State Insurance Commissioner Alfred W. Redmer Jr., who came to office with a mandate to increase competition in Maryland's insurance industry, has resigned his post to head a Delaware health maintenance organization.

The former Republican delegate and insurance broker from Perry Hall was admired by industry officials, but his two years in office were marked by several disputes.

He eventually won over those who criticized his response to complaints stemming from Tropical Storm Isabel, but he was rebuked by Democrats for his political activity and for his decision to let HMOs pass along a tax increase to their customers. And his agency was at the center of the furor over Joseph F. Steffen Jr., the gubernatorial aide whose e-mails sparked an investigation into politically motivated firings.

Redmer, 49, said yesterday that he has few regrets about his tenure and believes he has increased competition in Maryland without sacrificing consumer interests.

"The governor gave me as a single directive that we need to continue to maintain vigorous consumer protection, but we need to do it in a way that fosters a business-friendly environment," Redmer said. "Vigorous consumer protection and vigorous competition are not mutually exclusive."

He leaves his $136,000-a-year state job Friday to become the chief executive officer of Coventry Health Care of Delaware, a regional health insurance company that does business in Delaware, Maryland and southern New Jersey.

Gov. Robert L. Ehrlich Jr. praised Redmer yesterday for bringing business and political savvy to the post.

"His perspective as the state's top insurance regulator reflected an expert understanding of the insurance industry and the need to safeguard and serve the public," Ehrlich said in a statement.

But Redmer has faced criticism at times from leading Democrats and consumers that he has been too cozy with the insurance industry.

Democrats reacted angrily - some calling for his resignation - when Redmer told HMOs this year that they could pass on the costs of a new 2 percent premium tax to consumers without going through a rate hearing. Democrats enacted the tax over Ehrlich's objections as part of a plan to hold down medical malpractice insurance rates.

Redmer said at the time that he was simply following precedent, but Senate President Thomas V. Mike Miller said he should step down so the state could have "a watchdog instead of a lapdog."

After Tropical Storm Isabel, victims accused the Maryland Insurance Administration of being insensitive to their plight and unwilling to help them resolve disputes with the National Flood Insurance Program.

At a town hall meeting after the 2003 storm, Redmer told the audience that he understood their frustration because his weekend house on the waterfront had been destroyed, a remark that fell flat in a crowd of people who had lost their homes.

However, advocates for Isabel victims said yesterday that Red- mer became a powerful ally.

Steve Kanstoroom, a Talbot County man whose research helped convince Congress that the federal flood program was flawed, said Redmer persuaded federal officials and other insurance commissioners to take up the issue.

"He moved heaven and earth to do that," Kanstoroom said.

The National Flood Insurance Program eventually agreed to re-examine Isabel claims, and it paid out $8.6 million in additional settlements to victims in Maryland, Virginia and North Carolina.

Redmer said he built on his agency's experience from Isabel to create a consumer education and advocacy unit, which informs citizens about insurance issues and expedites the state's response to complaints.

Immediately after taking office in June 2003, the former House minority leader came under fire when a Baltimore attorney organized a $2,000-a-head Ehrlich fund-raiser with Redmer as the headliner. The event was eventually canceled.

A year later, Democrats and watchdog groups complained about an invitation-only meeting Redmer held with selected insurance industry executives, saying it raised questions about who had access to the commissioner and influence over his decisions.

The agency also came into the public spotlight when Steffen, a longtime Ehrlich aide who was then the communications director for the Insurance Administration, resigned amid news reports that he had spread rumors on the Internet about Baltimore Mayor Martin O'Malley.

E-mails Steffen wrote on the job also showed he was trying to identify employees at the Insurance Administration and other agencies where he worked who could be replaced with people more loyal to the governor.

But insurance industry insiders say Redmer's legacy will be one of maintaining consumer protections while fostering greater competition in Maryland's insurance market, a development that they say will give consumers more choice and ultimately drive down premiums.

Maryland Health Care Commission Chairman Stephen J. Salamon said two companies make up 94 percent of the small group health insurance market, a situation that "is not healthy for our business climate or our small employers."

"The insurance commissioner has been working very hard in an attempt to rejuvenate that market with some additional competition, and to the extent his successor continues to do that, it'll be a good thing for our state," Salamon said.

Deputy Commissioner James V. McMahan III will serve as acting commissioner until Ehrlich names a permanent successor.

andy.green@baltsun.com

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