3 amendments seek PRC changes

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By The Staff

Three of the five constitutional amendments voters will decide on in November deal with the state Public Regulation Commission, a powerful state agency that regulates everything from utilities to insurance companies.

The proposed changes are partly due to the scandals the PRC has found itself in in recent years, including the troubles of former PRC commissioner Jerome Block, who left the PRC amid mounting turmoil.

Block resigned his position last year as part of a plea agreement with the Attorney General’s Office over misuse of taxpayer money and election law violations.

Amendments to the state constitution are approved by a majority vote of people casting ballots on the proposition. Early voting for the Nov. 6 general election started Tuesday.

What follows is a summary of the pros and cons of the three amendments related to the PRC, as presented by the non-partisan Legislative Council Service.

Amendment 2 would require the Legislature to establish increased qualifications and continuing education requirements for individuals running for and serving as a commissioner. If enacted, the new requirements would apply to commissioners elected during the 2014 general election and thereafter and to any commissioner appointed to fill a vacancy after July 1.

Proponents for Amendment 2 argue that minimum qualifications should be set for PRC commissioners given the vast regulatory powers held by the agency.  They argue that that is particularly true given the fact that there are only five commissioners. Currently, the only requirements for commissioners is that they are at least 18 years of age, that they not be a convicted felon and that they are registered to vote in the state.

Among the arguments for Amendment 2 is that commissioners need to know and understand the law pertaining to their work, that education and experience are necessary to serve effectively as a commissioner and that qualified commissioners are needed to restore the public trust in the agency.

Among the arguments against Amendment 2 is that while it calls for increased qualifications for commissioners, the amendment doesn’t specify what those qualifications would be, leaving it to state law makers to decide. Another argument against the proposal is that state lawmakers could impose onerous qualifications that preclude the average citizen from serving as a commissioner.

Amendment 3 would strip the PRC of its duties to charter and regulate corporations and vest the responsibility of chartering corporations with the Secretary of State’s Office. The amendment doesn’t address regulation of corporations.

Proponents of the amendment argue that most other states already assign the duty to charter corporations to the secretary of state and that the move would free the PRC to focus on its regulatory duties.

Among the other arguments for the move is that it would create a one-stop shop for businesses given that the secretary of state already handles registration of limited liability partnerships, state trademarks and filing of documents under the Uniform Commercial Code, among other things.

Arguments against the amendment include concerns that the measure fails to assign regulation of corporations to any state agency. Other arguments against the amendment are that the current system is working well and shouldn’t be changed, that the Legislature needs to study where to best place non-regulatory PRC functions, and that the proposed change will be expensive, cosmetic in nature and lacks any real benefits to businesses or taxpayers.

Amendment 4 would create an Office of the Superintendent of Insurance, stripping the PRC of its responsibility to regulate insurance companies and others engaged in risk assumption in the state. The measure would also establish an Insurance Nominating Committee to evaluate applicants and appoint the superintendent of insurance. The Legislature would determine how the office would regulate the state’s insurance industries, the qualifications for the position and the manner of appointing members of the Insurance Nominating Committee.

Proponents say Amendment 4 would ensure timely action by insurance regulators, arguing that the PRC’s past failure to amend its rules cost homeowners money.  Other arguments for the amendment are that regulating insurance is too complicated and too important and should be overseen by an independent and qualified insurance department and that the move would insulate the insurance division from politics. Thirty-five other states have standalone insurance departments. Proponents also argue that the move would allow the PRC to focus on its core function — regulating utilities.

Among the arguments against Amendment 4 is that it is too vague regarding the establishment of the proposed Insurance Nominating Committee and the qualifications for the superintendent of insurance.

The amendment does not, for example, specify whether the makeup of the committee would include or exclude elected or appointed officials, members of the public, PRC commissioners or insurance experts. The amendment leaves the decision up to state lawmakers.

Other arguments against the measure are that the insurance division is already on a path of reform, that the move would shield the insurance office from voter accountability and that it fails to address the hiring of unqualified employees.