NM Insurance Commissioner to Retire as Part of Settlement Agreement

Associated Press
May 18, 2006

State Insurance Superintendent Eric Serna has agreed to retire as part of a settlement agreement approved Thursday by the state Public Regulation Commission.

Serna, whose retirement was sought by the commission, has been under investigation by the PRC.

The agency also asked state Attorney General Patricia Madrid in March to investigate a contract between the state Insurance Division and a Santa Fe bank that had made hefty contributions to a nonprofit foundation led by Serna.

Serna will retire June 14, allowing him to attend a conference of the National Association of Insurance Commissioners but not at state expense. He is the secretary-treasurer of the group.

Until then, Serna will be taking vacation and will not be allowed to do any Insurance Division business.

Serna has been on paid leave since April while he has been under investigation by the attorney general's office. The leave would have expired June 9.

As part of the settlement, Serna agreed not to attack the commission or to sue the commission.

The commission, which oversees the Insurance Division, will drop its internal investigation. The PRC said its agreement with Serna would not affect the ongoing investigation by the attorney general.

The retirement and settlement agreement were accepted by the commission on a 4-1 vote, with Commissioner E. Shirley Baca dissenting. She said she had no objections to Serna's retirement, but objected to the settlement agreement, which she likened to "holding us hostage."

Jason Marks, commission vice chairman, said it was "a very favorable agreement for the PRC and the public."

Marks said it saved a potentially long and expensive legal fight had the commission fired Serna.

"He's leaving on a dignified note and he's agreed he's not going to bring any claim against us," he said.

The agreement was negotiated largely between Chairman Ben R. Lujan and Serna, Marks said.

Marks was the only commissioner who attended Thursday's PRC meeting in person; the rest of the commission was hooked up by telephone.

Century Bank won a contract in 2003 to act as the depository for hundreds of millions of dollars in securities that insurance companies are required to post. The bank has contributed $129,000 to Con Alma Health Foundation, which Serna helped found.

Serna subsequently resigned as president of the foundation board.

He has said the contract with Century Bank which for a time included fees to the bank higher than allowed by law had nothing to do with the donations to Con Alma.

In addition to boxes of documents from Serna's office, Madrid also has asked for information from Con Alma, including an accounting of all donations.

Copyright © 2006 by Associated Press

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