These industries require domain expertise gained over years in order to understand the fundamentals of these industries at macro and micro levels, So, who better to help regulate them then people directly from the industry with that expertise. Career politicians and bureaucrats simply have no real world experience, so we must get industry insiders to provide insight.
Just as an auditor doesn't need to be a domain expert to audit a companies books, a regulator doesn't need to be one, at least from an industry POV.
The question you have to ask is what's the motivation to approve (or deny) a given application or law? If it's because it's the 'right thing to do' (broad term I know) then fantastic. If it's to 'help out a mate' or 'it may be the right thing to do, but meanwhile there's incentives for me to vote this way' then that's where integrity has to be questioned.