LANSING – After Governor Rick Snyder announced the appointment of Treasurer-designate Kevin Clinton on Tuesday, Clinton said he plans to devise a mathematical model that would enable the state to project five years into the future to see how the finances of local governments and school districts would look as a way to head off more emergency managers.
Since Snyder took office in 2011, Treasurer Andy Dillon, who announced his resignation last week after a series of personal problems, put a major emphasis on the local government finance role of the department. Clinton, the director of the Department of Insurance and Financial Services, will inherit that role while Snyder promoted his top deputy at DIFS, Ann Flood, to succeed Clinton in that job. The appointments take effect November 1.
There has been a rush of cities and school districts falling under state control as a result of financial problems in the past three years with a new local financial emergency law, now PA 436 of 2012, which gives the state more ability to intervene and much greater powers to the state-appointed emergency manager.
“As an actuary, I intend to explore the possibility of developing mathematical models that can predict the future financial needs of a municipality or school system five or more years into the future,” Clinton said at a news conference. “This early warning system would allow municipalities and school systems to identify potential future financial problems and take the necessary steps to firm up their finances and eliminate the future need for an emergency manager.”
Clinton said any number of factors could go into such a model, such as population trends, debt, when that debt is due and cash flow.
Snyder lauded Clinton’s credentials, saying part of why he decided to elevate the Office of Financial and Insurance Regulation to department status was Clinton’s performance. Prior to running OFIR, Clinton was president and CEO of American Physicians Capital, Incorporated, a medical professional liability insurance provider based in East Lansing. In the 1980s, he was chief actuary for what was called the Michigan Insurance Bureau.
Snyder said he was looking for someone with a finance and business background who would apply policies simply and fairly.
“Kevin’s been an outstanding part of the administration for some time now,” Snyder said.
At the top of Clinton’s to-do list is Detroit, currently seeking eligibility through its emergency manager and the permission of Snyder to enter into Chapter 9 bankruptcy. He noted he was born in Detroit, grew up in the city in his early years and worked in the city.
“I’m going to have to do a considerable amount of homework,” he said. “I’m a quick study. I’ll do the necessary work to get up to speed.”
Clinton said he had no hesitation about the job despite its challenges. He said Snyder first inquired about his interest in the post about two weeks ago.
“I’ve always liked a challenge,” he said. “The insurance companies that I worked for, just about every one had financial problems when I got in there. And it was a matter of going out, finding what the issues were, meeting with people and solving the problems. Treasury’s probably no different.”
Meanwhile, Flood, like Clinton, has a background at APCapital, where she was executive vice president and chief operating officer. In addition to being an attorney and a registered nurse, she has held high-level positions at other insurers.
Snyder said naming Flood was “a very easy call.”
“She’s done an outstanding job in the department already,” he said. “She has a great understanding and a wide perspective on issues facing the insurance and financial industry.”
Flood said she intended to continue Clinton’s policies. She is now the fourth woman to lead a department in the Snyder administration. There are 13 departments where Snyder has direct control of appointing the director.
The appointments won praise from the insurance industry.
“Kevin Clinton has done an outstanding job as the state’s insurance regulator,” said Pete Kuhnmuench, executive director of the Insurance Institute of Michigan. “He balanced the needs of consumers while allowing insurance carriers the ability to grow in the marketplace. We believe the industry’s positive relationship with the department will continue under the direction of Ann Flood. Flood brings a wealth of health care, legal and insurance industry experience to her post and that the consistency found under Kevin Clinton’s leadership will continue for the benefit consumers and the industry.”
“The governor’s selection of Ann Flood as director shows his commitment to make Michigan a state where the insurance industry can invest, grow and expand,” said Kurt Gallinger, chair of the Michigan Insurance Coalition. “To have an executive with extensive business, health care, and legal credentials in charge of shaping the regulatory and economic environment for the state’s financial services sector is an exciting development. We offer our support and look forward to working with Director Flood.”
Clinton will receive a raise from the salary he received as insurance director, getting the same $174,204 a year Dillon did. Flood’s salary will be the same as Clinton’s was at DIFS, $145,000 annually.
