The Incredible Shrinking Dept. of Insurance-Updated

I don't know how insurance regulation is faring in other states (well, that's not true--but I have better intel about the department of insurance in my home state) but here in Illinois, the staff of the Illinois Department of Insurance is now about half what it was a few years ago. And the exodus of experienced people from that department continues--in fact, it's probably accelerating.  I've written about this earlier, so I don't mean to sound like a broken record, but several more experienced, high level people have fled the department just this year, and the tales they tell about workplace morale there are worrisome.

Now, some folks might not feel that reductions in the size of state government bureaucracy are necessarily a bad thing--but it remains my view that it is a terrible mistake to depopulate the agency that protects the public from insurance company errors and abuses. Yet that is exactly what has been happening in Illinois, and what continues to happen here.

My initial dark suspicion, based on some earlier insider information, was that the insurance industry liked such a depopulation just fine. But it may now be getting to the point where even the insurance industry is discovering the downside of having this important agency crippled.

The sad thing is, the Department of Insurance isn't funded by the taxpayer--it's funded by fees paid by the insurance industry. So the DOI has become a cash cow for state government--the agency's budget is kept low so all those industry fees can be diverted into other projects that various politicians deem more worthy, more important, more relevant to said politicians re-election efforts.

My word from inside the Illinois DOI is that there are few experienced people left, and that morale among those still there is pretty low. And no matter what certain folks might claim, there are some damn important functions of state government that need to be done competently and fairly. And it's hard to do that without staff that aren't suffering from the workplace equivalent of PTSD.