Senate committee rejects Barbara D. Richardson for Arizona insurance director after divided hearing

The Arizona Senate Committee on Director Nominations on April 17 heard extended testimony for and against Barbara D. Richardson’s nomination to lead the Department of Insurance and Financial Institutions and ultimately voted to recommend that the full Senate reject her confirmation.

Richardson, who served as acting director of DIFI, told the committee she had taken steps to address the panel’s earlier concerns, including publishing a draft bulletin and opening a comment period; pledging to use the bulletin process instead of the agency’s SURF messaging system for future substantive regulatory announcements; and withdrawing DIFI staff from recent National Association of Insurance Commissioners (NAIC) work streams described by critics as focused on “race and insurance” and climate resiliency.

The committee’s deliberations drew extensive public testimony. Industry executives including Elijah Norton and Joe Steenburgen said DIFI’s service levels and responsiveness have fallen under Richardson’s leadership and urged rejection. Several other speakers—mostly from conservative and industry groups—raised objections tied to Richardson’s past participation on NAIC efforts they characterized as related to diversity, equity and inclusion (DEI). Some witnesses said they feared possible aggressive enforcement or regulatory targeting if Richardson were confirmed; others warned comparisons to policy choices in California.

A smaller set of witnesses and trade groups testified in Richardson’s support. Kelsey Lundy of Compass Strategies and Chad Heinrich of Arizonans for Affordable Health Coverage told the committee they have worked with Richardson and experienced fair, professional interactions from the department. Lundy said DEI had not been raised in her dealings with the agency.

On formal action: following Richardson’s return to respond to committee feedback, Vice Chair (speaker not named in the record) moved that the committee recommend confirmation to the full Senate. The roll call on that motion produced two ayes and three nays, and the motion to recommend confirmation failed. The committee then voted on a motion to recommend rejection; the roll call on that motion produced three ayes and two nays and the committee recommended rejection to the full Senate.

Committee members who explained their votes cited two recurring concerns: delays and communication problems in DIFI’s licensing and filing services, and the department’s prior use of the SURF system to notify industry participants about potential noncompliance rather than issuing a substantive policy statement subject to gubernatorial review and public comment. In his explanation, one senator said the practice effectively bypassed the Governor’s Regulatory Review Council oversight process and limited public scrutiny.

Richardson told the committee she did not intend to use the regulator’s office to “socially engineer” industry practices, reiterated that Arizona statute forbids use of race in insurance rate‑making, and said she had not initiated DEI programs within DIFI. She also described staffing changes and reported that DIFI processed what she said was approximately 22,000 producer initial and renewal applications in fiscal year 2024—the highest annual total reported to the committee—and that the agency added a licensing position to reduce per‑staff workload. The department also published a draft bulletin that, according to Richardson, establishes a grace period through Jan. 1, 2027 during which the department will not take enforcement action on the two registration/permit issues described in the bulletin while it solicits stakeholder comment.

The committee record shows a mix of industry concern about enforcement and process and support from trade representatives who said Richardson acted professionally and deferred to statutory authority. The committee’s recommendation to reject will be transmitted to the full Senate for consideration.

Richardson appeared before the panel to respond to previously raised concerns and to summarize the department’s operational changes; several witnesses urged the Senate either to confirm or reject based on their experience with the department and the nominee.

Votes at a glance: - Motion to recommend confirmation of Barbara D. Richardson to the full Senate — outcome: failed (2 ayes, 3 nays). Ayes recorded in debate: Senator Bravo; Senator Ortiz. Nays recorded: Senator Kavanaugh; Senator Joe Powell; Senator Hoffman (as recorded by the roll calls and subsequent explanation). - Motion to recommend rejection of Barbara D. Richardson — outcome: passed (3 ayes, 2 nays). Ayes recorded: Senator Kavanaugh; Senator Schoep (recorded as "Aye"); Senator Hoffman (explained his vote). Nays recorded: Senator Bravo; Senator Ortiz.

The full Senate will receive the committee’s recommendation to reject Richardson’s nomination.