Alabama Insurance Commissioner Walter Bell's move to a seniorposition at a major reinsurer fails the proverbial smell testmiserably. So blatant and audacious a disregard for appearance andpropriety can only be called shameless. Unfortunately, it is butthe latest in a string of shameless moves of commissioners to theranks of the industry they were charged with regulating.

Yes, my friends, we are back to taking one more turn through therevolving door headquartered in Kansas City, Mo., and otherwiseknown as the National Association of Insurance Commissioners, whichMr. Bell once led as president.

It was announced on Aug. 19 that Mr. Bell was leaving theAlabama department to become chairman of Swiss Re America HoldingCorp.

Alabama law is pretty clear on situations like this: No publicofficial or public employee who personally participates in thedirect regulation, audit, or investigation of a private business,corporation, partnership, or individual shall–within two years ofdeparture from such employment–solicit or accept employment withsuch private business, corporation, partnership or individual.

How did Mr. Bell get around this seemingly insurmountableobstacle vis a vis employment with Swiss Re–at least a few of whoseunits are regulated by Alabama?

It works out serendipitously because, you see, Mr. Bell will notbe working for any of those units. He's going to be working for theholding company.

Thank goodness for that! That loophole obviates what mightotherwise seem like a huge conflict of interest, doesn't it?

We're following the letter of the law, see? It says so righthere.

Never mind that the spirit of the law has been tied up, trussedup and thrown overboard with nary a glance back.

And let's not forget that this arrangement had to have beencarried out while Mr. Bell was still the nominal head of theAlabama department that was overseeing some Swiss Re units. It'sokay, since the negotiations were with the holding company.

NAIC-funded consumer reps were right to be outraged over thislatest spin of the regulatory revolving door. They called on NAIC“to institute a strong conflict of interest policy, which includesa prohibition against lobbying the NAIC or other insuranceregulatory bodies…for a period of two years following departurefrom public service.”

They also said “the movement of regulators to industry feeds theperception that NAIC leadership positions are a stepping stone tofuture industry employment. Instituting a strong conflict ofinterest policy with revolving-door safeguards would help erasethat image…”

NAIC's response essentially was a shrug of the shoulders: Wehave an ethics policy in place, but we can't enforce it. That's upto the individual states.

I would actually go further than the consumer reps. Rather thansimply having a two-year lobbying ban, I would suggest thesituation calls for a two-year employment ban in the industry.

Yes, I can hear the howls and squeals. Don't you know this isAmerica, and even insurance regulators have to support theirfamilies? But I say if you are going into public service, it shouldbe to serve the public unreservedly, and not as a launching pad foran industry position where the really big bucks are to be made.

Insurance companies and associations also need to understandthey are just as responsible for the revolving door, since they'rethe ones dangling those big-buck positions. In any case, it's waypast time for some really powerful air freshener in thisbusiness.