Securities, Insurance Merger Advances With Change


By John Celock

Kansas lawmakers have advanced the governor’s push to merge the state’s securities and insurance regulators but have added a new ban on securities regulators from working outside state government.

The state House of Representatives advanced legislation Wednesday that would move the state securities commissioner from under the governor’s oversight and merge it into the insurance commissioner’s office. Under an amendment the House adopted, the securities commissioner and attorneys in the securities office would be barred from holding outside employment, which is common currently.

“At present the Kansas securities commissioner makes $110,407 and he also according to the county clerk in Jefferson County serves as their county attorney where he makes $67,000 and he’s the Jefferson County counselor where he makes $36,000,” Rep. John Carmichael (D-Wichita) said in sponsoring the amendment. “Our securities commissioner is making in excess of $200,000.”

Carmichael said that he had issues with Securities Commissioner Joshua Ney or other attorneys in his office holding state posts and other jobs outside of state government. He noted that the state pays $600,000 a year for legal staff in the securities commissioner’s office.

The merger of the two offices was first proposed by Brownback in his State of the State address in January, as part of an efficiency move by Brownback. The move would place the securities commissioner’s office under elected Insurance Commissioner Ken Selzer’s (R) office. Under the legislation, the insurance commissioner would appoint the securities commissioner with the consent of the state Senate, which is currently done for gubernatorial appointees to the post. The prosecutorial role of the securities commissioner would shift to the state attorney general’s office.

The move would be similar to what several states have done in merging insurance and securities regulation into a joint agency, including New York which made the move in 2011 when lawmakers merged the Department of Banks and the Department of Insurance into the Department of Financial Services. Brownback did not propose moving the state banking commissioner or the state credit unions director from the governor’s oversight to the insurance commissioner’s.

Rep. Vic Miller (D-Topeka) proposed an unsuccessful amendment to move the securities commissioner to the attorney general’s office. Miller and Democrats said that the move would allow for the securities regulation to be separate from insurance and would work well with the attorney general’s role in consumer protection. Carmichael said that it would keep the elected insurance commissioner from being able to raise money from two industries regulated by the office.

Republicans objected to the measure, noting that it is unknown if Attorney General Derek Schmidt (R) wants to handle securities regulation and if it would work. In addition, concerns were raised about the attorney general’s office not being able to perform certain licensing functions that the insurance commissioner’s office already handles.

“We have not had any study of consolidation under the attorney general’s office,” House Judiciary Committee Chairman Blaine Finch (R-Ottawa) said. “We don’t know what cost savings it would have. We don’t know if the attorney general wants it.”