Eric Serna, under fire for his dual roles as New Mexico’s insurance superintendent and president of the board of a nonprofit health foundation, said he has decided to resign from the board.
Earlier on Tuesday, Public Regulation Commissioner David King had threatened to seek Serna’s removal from the insurance job if he didn’t leave the board of trustees of Con Alma Health Foundation Inc.
Attorney General Patricia Madrid also had urged Serna on Tuesday to resign from the board and directed her office to start an audit of the nonprofit organization.
Serna said he made the decision after meeting with PRC Chairman Ben Ray Lujan and Vice Chairman Jason Marks.
Serna said Con Alma “doesn’t need the controversy that’s been created. It’s taken away from its goals of serving kids in underserved areas.”
King had said the dual roles created an appearance of impropriety. He made the comments as the PRC ordered the revision of a contract between its Insurance Division, which Serna heads, and Century Bank. Commissioners said the initial contract resulted in illegal overpayments to the bank.
Century Bank has donated more than $124,000 to Con Alma, which was founded by Serna and gives grants to health providers, the Albuquerque Journal reported recently in a copyright story.
Serna said there was nothing inappropriate about the contributions.
Serna also said he was unaware the contract revision he approved last year with Century Bank required fees that exceeded those allowed by division regulations.
“It wasn’t that there was any intention to go over the cap. It was just a mistake,” he said.
Century Bank said in a letter Tuesday that the overpayments — which commissioners said could total as much as $200,000 — would be refunded to about 1,600 insurance companies as credits against future fees.
The bank said it had been unaware of any problem with the higher fee.
Insurance companies must deposit securities or other assets with the state, guaranteeing they can pay their insurance claims. Century Bank –owned in part by Santa Fe businessman Gerald Peters — holds about $400 million as the depository for the money.
The original 2003 contract allowed the bank to get a fee of up to 0.2 percent of the face value of each depositor’s total securities, the cap allowed by regulation. The 2005 change allowed the bank to get 0.25 percent.
The four commissioners at Tuesday’s PRC meeting voted unanimously to revise the contract to 0.2 percent, require the bank to refund overpayments and refer the matter to the attorney general for review.
The PRC also voted to tighten its procedures by requiring that all future contracts — even those that don’t involve state money — be reviewed by the commission.
Serna said Century Bank’s donations to Con Alma were “completely appropriate and legal,” and something that “good corporate citizens do … as a matter of course.”
He said it was unfortunate Century Bank’s relationship with the Insurance Division was “its donations to the nonprofit organization.”
King said Serna assured him he was not pressuring companies his division does business with to contribute to Con Alma, but King said he was concerned about how it appeared.
King said he wasn’t sure it had “totally dawned on the superintendent what kind of position he’s putting us in.”
Madrid said in a statement that Serna’s “continued involvement is not in the best interests of Con Alma.”
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