Blumenthal vs Dodd: Meet the New Boss, Tougher Than the Old Boss
The news that pro-business Connecticut Sen. Chris Dodd will not seek reelection is likely to make the financial community unhappy - and none more so than the insurance industry.
"Senator Dodd has been very, very responsive for many years to the needs and concerns of the insurance industry - historically the leading employer in Connecticut," says Ken Crerar, president of the Council of Insurance Agents and Brokers. According to National Underwriter, Crerar worked for Dodd when he was a U.S. Representative.
Pundits are predicting that this blue state will elect longtime state Attorney General Richard Blumenthal to replace Dodd. By all accounts, Blumenthal does not have the same affection for insurers as Dodd.
The headline from a November New Haven Independent story read, "Blumenthal Slams Insurance Companies." While he was berating health insurers, he has made it clear that he had no love for other carriers. His recommendation: like himself, the state insurance commissioner run for election, which would put insurers more at the mercy of populis sentiment.
At the federal level, Blumenthal told Bloomberg News that he favors a consumer financial protection agency. While this agency would discipline errant banks, it's clear that it would also have some authority over insurers.
The AG, who has modeled himself on former New York Attorney General Eliot Spitzer, has not been afraid to take on sacred cows like The Hartford, one of the state's largest property and life insurers.
But there are three bright spots for the industry. One is that he might not get elected, although he is considered the frontrunner. The second is that aggressive attorneys general frequently morph into kinder, gentler people when they leave the AG's job to climb the political ladder. Spitzer was a better friend to the financial community as governor than as the industry's top cop.
And finally, Blumenthal will have to gain power and influence in the Senate before he can walk in Dodd's shoes. When Dodd steps down, he'll likely be replaced by South Dakota Sen. Tim Johnson, with help from Rhode Island Sen. Jack Reed. Insurers currying favor will knock on their doors rather than Blumenthal's.