FormerInsurance Commissioner Jim Poolman said he did nothing unethical in office, in response to a letter sent this week to a national agency by consumer representatives that said policy decisions were swayed by industry players.

The letter, sent to the National Association of Insurance Commissioners, raised questions about the process in which changes to a viatical settlement model were made; viatical settlement is the process of a third party buying out an insured person's death policy, paying the insured a cash percentage of the policy.

The letter also drew conclusions about Poolman's perceived change of attitude for a viatical settlement model and an industry player, InsCap, as well as questioning his sudden move into the private industry.

The letter asserted that Poolman was inappropriately influenced by InsCap, a premium finance company, through campaign contributions.

According to the letter and an attached timeline, Poolman was not in favor of a viatical settlement model presented by the company LILAC; LILAC later changed its model and became InsCap, which Poolman heartily supported.

A few months earlier, in May 2006, Poolman had received $25,000 in campaign contributions from the wife of an InsCap executive, according to the letter.

Poolman did not deny that he received the campaign contributions, which were during a non-election year.

"The campaign contributions were made lawfully, (were) reported, were a year and a half old,"Poolman said. "… Political candidates are always raising money, because they have political operations to run."

For example, he said, if he takes his wife to a meeting, contributions can be used to pay for that.

He said he gave much of the contributions given to him that year to legislative candidates and statewide candidates, and used some for political purposes.

But the money did not change his opinion, he said. In fact, he said LILACcame back with a different company and a different model under InsCap, which he agreed with and supported. They cut out a part of the model he had particularly disagreed with, he said.

Poolman's newer model for viatical settlement, which passed unanimously through the NAIC, specifically extended the timeframe for when consumers were allowed to sell their policies to five years from two years.

Birny Birnbaum, a consumer representative who signed the letter, said that could negatively impact consumers who may need the money quicker. He added, however, that Poolman's time in office was very consumer-driven.

"He was as good or better than what any other state had done,"Birnbaum said, adding that the only thing they disagreed on was the viatical settlement model.

"We thought that was not only going to affect SOLI (stranger-owned life insurance companies), but consumers who had a legitimate reason for selling their policy,"Birnbaum said.

Birnbaum said he would have liked to see more stringent regulations on SOLI, not on the consumers.

The letter also addressed concerns about insurance commissioners leaving office to go directly into business with the companies they had formerly regulated.

"Jim Poolman's sudden resignation and move to the industry was very disappointing to me. Unfortunately, it's not unusual. It's not even the worst case,"Birnbaum said. "The idea that you take a job with the industry you just regulated on issues you had jurisdiction over, to me, is a bad thing."

An Associated Press article said he had lined up lucrative consulting work, which could include a $300,000 annual salary and the use of a New York apartment. Poolman has since said those are exaggerated figures and the result of gossip.

The issue of whether or not Poolman, who resigned abruptly in August to start a consulting business, would work for InsCap has raised questions as to whether he was influenced while in office.

Poolman said Friday that he had not yet signed a contract and would not say what companies had approached him, when asked whether or not he would work for InsCap.

He said only that he has talked to a NewYork-based consulting firm.

Regardless, he said, "(InsCap) did not benefit from the viatical settlement model, or writing loopholes into the model. The company is a premium finance company, it is not a life settlement company. They would not be affected, anyway."

Poolman, 37, was first elected to the post in 2000 and re-elected in 2004. He had previously served for eight years as a Republican state legislator from Grand Forks and a trust officer for Bremer Bank.

Gov. John Hoeven said he appointed deputy insurance commissioner Rebecca Ternes to temporarily run the department while he searches for candidates to fill out the remainder of Poolman's term.

"We are working on putting somebody in that position who will represent the people of North Dakota,"said Don Canton, with the governor's office. "Somebody who will do a good job. We're working on getting the very best person possible in that position."

(Reach reporter Crystal R. Reid at 250-8261 or at crystal.reid@;bismarcktribune.com.)