Neb. Director Says Industry is “Poster Child” on Global Warming

Insurance Commissioner L. Tim Wagner has spent close to 40 years in the insurance industry, the last nine as the appointed Nebraska regulator. He takes his role seriously and believes the insurance industry has a real impact on the economy and therefore has a real political voice and a responsibility to use it.

As chair of the National Association of Insurance Commissioner’s (NAIC) Climate and Global Warming Task Force, Wagner believes that the industry should be a leader in taking action to alert the public about climate warming and the dangers of carbon dioxide.

“The insurance industry is almost like the poster child for climate change or global warming. The industry has felt the impact of four major events beginning in 2004 with $27 billion in losses and then in 2005 we had a $57 billion dollar loss because of hurricanes in our coastal regions. It ought to be a wake up call that we need a strong federal, national policy on carbon incineration,” Wagner said.

The Nebraska commissioner feels strongly that future generations will be affected by actions taken today. He believes that mobilizing the insurance industry on this issue and recognition of its social responsibility is clearly important.

“Historically the industry has been a mover on social causes. It is the industry’s responsibility to help people. It is their call to protect people and spread risk. The industry has taken an active role in safety. I would like us to take the same active role in bringing the concerns about global climate changes and our dependence on a lifeline to carbon to the public’s attention.”

Another top concern in Nebraska is the dispute between body shop owners and insurers. Wagner describes the debate as contentious and says as a regulator he feels an obligation to help resolve it so that consumers don’t feel the brunt of higher premiums because of the tug and pull between the industry and body shops over discounts and referrals.

Wagner says that there is a growing concern on the part of auto repair shops that the insurance department is not doing what they view as it’s responsibility in governing the adjustment process between insurers, who are payers, and the body shops, who are providers.

“This issue is gaining some contentiousness, and we’ve been interjected into a process,” he said. “It’s one of those issues that as a regulator, it’s very difficult to interject yourself between business to business transactions. You can’t be omnipotent, and you can’t be omnipresent, and clearly there is a process that takes place in the interplay that is very, very difficult to regulate.”

Wagner insists that the Insurance Department gets relatively few, if any, complaints about the quality of auto body repairs. Some of these repairs are done by body shops that have signed service agreements with insurers, requiring the body shop to have a certain level of education, to have certain equipment on staff, and meet certain quality standards. Is that anti competitive? “I don’t know that it is, but clearly the body shops have a different view of those agreements, he said.

Wagner views the issue as a fairness one.

“My focus is for legislators to understand that every dollar that is paid out in a claim runs through the system and is a dollar that is paid by consumers in premium payments…I want the insurer, who actually is a purchasing agent for the insured, to be fair with the repair shops, but by the same token, I don’t want insurers to pay more than what is reasonable to repair an automobile, because that translates into higher premiums for consumers,” Wagner said.

Wagner shared his views on global warming, auto body shops, national catastrophe, agent commissions and more during an interview with Insurance Journal, one in the series with 15 state insurance regulators. Wagner’s video interview can be viewed in its entirety at www.insurancejournal.com/broadcasts.

Topics Climate Change Market