As Ohio’s lieutenant governor, top insurance regulator and leader of a statewide regulatory reform initiative, it might seem that Mary Taylor’s public responsibilities would often pull in her in conflicting directions.
That would not be the case.
Taylor’s two primary functions as lieutenant governor are to direct the Department of Insurance and lead the Ohio Common Sense Initiative, or CSI, which was created four years ago with the aim of streamlining business regulation and making Ohio a more business-friendly state. Those roles fit together “better than you might think,” she said.
Before she became an elected official Taylor was a CPA working in private sector public accounting. As a tax accountant and consultant, she focused a lot on employee benefits during her last 12 years in the private sector — “things like health insurance and pensions and retirement planning.
“So professionally, I was a little bit in the arena on the consulting side as it relates to insurance. I wasn’t an agent … but I was a CPA that worked as a consultant on that side,” Taylor said.
She also served as state auditor prior to being elected to the lieutenant governor post.
“It’s been somewhat traditional in Ohio that the lieutenant governor would also then become an agency director. Because of my professional background and my interests, that’s how I ended up at the Department of Insurance and being the director … because it seemed like my professional background fit and certainly, personally, was where my interests lie,” she said.
A Meeting of Minds
One of the first things she undertook as lieutenant governor/insurance director was to convene a meeting of domestic insurance CEOs to “open up the dialogue about the regulatory environment, the regulatory climate,” Taylor said. She wanted to know for instance, “how do we foster competition, which benefits consumers in the way of better quality, lower prices?”
A couple of regulatory reforms coming out of that meeting were aimed at increasing competition while also serving consumers more effectively, and involved electronic communications, Taylor said.
“Insurance companies wanted to be able to communicate electronically with their consumers. So that was something that we went to work on to make sure that where a consumer was interested in communicating with their insurance company using e-commerce, we wanted to make that avenue available for them,” Taylor said.
The ability for consumers to provide proof of auto insurance through their mobile devices was also something that both policyholders and carriers wanted, so the department sponsored legislation to allow for that.
“If you are pulled over for any type of traffic citation you’re asked to show your proof of auto insurance. And prior to this law passing … we still had to have a paper card,” Taylor said. It “was something that was brought to us by the industry but it was something that was also very beneficial to consumers.”
The idea behind both such reforms is that companies will see cost savings, “which ultimately could relate to lower premiums,” she said.
Other regulatory and legislative issues the insurance department has worked on over the past couple of years include regulatory modernization, improvements to policy summary documents and allowing captive insurers to be formed in Ohio.
Both consumers and the insurance industry communicated the need for a clarified policy summary, Taylor said.
“We now allow the P and C companies to provide a one-page summary document on the insurance that an individual may have, so that they can have a better quick understanding of their coverage. That came about because of Hurricane Sandy. … We found that consumers weren’t as informed about their policies that we would like,” Taylor said.
There also appeared to be wide interest in allowing for the formation of captive insurance companies in the state of Ohio and the department “wanted to make sure we had the right regulatory infrastructure in place, the right funding mechanisms. … One of the things we wanted to make sure, and this is actually part of our legislation, was that we had a regulatory approach that allows the Department of Insurance to have oversight,” she said.
The insurance department has for now accomplished its major legislative goals and is not currently driving any legislation, Taylor said.
The agency is, however, an “interested party” in legislation addressing transportation network companies that is currently being debated by lawmakers, she said. Of particular interest to the department are the insurance requirements that apply to every phase of the operation of those types of businesses.
Educating the Job Force
Another initiative that came out of the meeting with the CEOs was an education task force to work with colleges and universities in Ohio to develop curricula for insurance education.
A study that came out about two years ago and has since been updated found that “in Ohio by the year 2020 there will be 26,000 jobs opening and available in the insurance industry. That was brought to our attention along with the fact that we didn’t have a comprehensive four-year curriculum at any one of our colleges or universities in Ohio,” Taylor said.
“So I worked with the CEOs. I worked with what we call the board of regents here who oversee our higher education. I worked with various colleges and universities. And because of the work that we did, which again, was brought to us by these CEOs, we now have a comprehensive curriculum at several universities here in the state of Ohio where you can actually go to college and get an insurance degree,” she said.
Four institutions so far have stepped up to meet the demand for insurance education and hopefully provide a path for filling those 26,000 job openings: Kent State University; the University of Cincinnati; Columbus State and Bowling Green University, Taylor said.
A Competitive Market
Ohio enjoys relatively low auto and homeowners insurance rates compared to other states. The Ohio Insurance Institute reported that Ohio had the 9th lowest homeowners rates and the 11th lowest auto insurance rates in the U.S.
Taylor said good competition and smart regulation help keep it that way.
“We have a lot of companies that write those types of policies in Ohio. I’d say because we have regulations that are smart, that hold insurance companies accountable in the way that they should be, but they’re fair and easy to comply with. That helps foster competition where companies are more willing to do business in Ohio,” she said.
That competitive pressure in turn results in better quality products, expanded customer choice and lower premiums, she said.