Oklahoma Insurance Commissioner Doak Has Had a Full Plate in 2011

In his first year as insurance commissioner of Oklahoma, John Doak has been a busy man.

Doak and the agency he leads have had their hands full implementing reforms in the workers’ compensation system, dealing with a host of natural catastrophes, encouraging insurers to offer more products and services in the state, and working with the governor and legislature to foster an “Open for Business” environment in Oklahoma.

A former insurance producer and agency principal, Doak believes in fostering a competitive, market-based approach to resolving insurance issues while continuing to serve consumers through outreach and regulatory protections.

Doak took over as insurance commissioner of Oklahoma in January 2011. Since then he’s been active in raising the public profile of the insurance department along with promoting the business climate in his state. And as a former insurance agent, he is a strong advocate for the role agents and brokers play in the insurance process.

In what could be described as trial by natural disaster, during his first year in office Oklahoma has been hit by flooding, high winds and hailstorms, tornadoes, wildfires and earthquakes.

In a recent conversation, Doak explained his approach to dealing with those types of catastrophes, as well as with the regulatory and legislative positives and negatives that go along with serving in elective office. Following are excerpts from that interview. Listen to the full interview with Commissioner Doak at https://www.insurancejournal.tv/videos/6232/.

Insurance Journal: You have expressed that you are not in favor of the Affordable Care Act. What alternatives you would suggest to assure that all or most of the citizens of your state have access to health insurance?

John Doak: Well, thank you for that question. One of the first things that we would do is. … We were close last year in the Oklahoma legislature for moving through an association of health plans. …

The backbone of our state is small business. To enable carriers to come together to buy coverage in larger groups with some underwriting criteria that we’ve been working on would be very, very helpful. Again, it’s a private sector solution outside of ObamaCare. …

We’re looking for alternatives in Oklahoma. We have a very good working relationship with the Oklahoma congressional delegation, with Sen. [James] Inhofe and Sen. [Tom] Coburn. They have made some very good comments and reforms. Dr. Coburn has outlined many good points that many Oklahomans would like to see.

I think there needs to be transparency in some of the healthcare legislation, healthcare billing that is in place. Enable the states to make more decisions here locally. Oklahoma is not a state that likes to be told what to do from Washington. …

We need to look at how we get our health care out into rural Oklahoma and work with our doctors to promote them and the healthcare networks that are available in our state, and also attract more healthcare companies into our state by working with our governor on Open for Business.

I think competition is one of the things that we believe in Oklahoma is the backbone of American ingenuity. That’s the backbone of commerce and the insurance industry that I’ve been a part of. I think that that’s by attracting these companies to come to Oklahoma, and then working to better connect.

In Oklahoma, both Republicans and Democrats, no one does not want to find a way for affordable healthcare. But we have to find a way to better serve our rural hospital networks and to work efficiently with them.

IJ: Only about one percent of Oklahoma homeowners carry earthquake coverage. How have the recent earthquakes affected consumers’ attitudes towards purchasing that coverage? Could you speak to the interest of companies toward coming into Oklahoma and offering that coverage?

Doak: There are a couple of new companies that we can talk about that are out on our website. One is, I believe, the Midlands Company in Oklahoma has stepped up and put together a pretty innovative plan that I think other states and other earthquake areas are going to be able to look at. It’s a deductible buy-down for a percentage deductible, I think, which is very innovative. There, again, I think that may help some folks.

But it’s interesting. Who thought that, as a new commissioner, I would be sitting here talking to you about earthquakes in Oklahoma? But we’ve known that there’s been tremors and shocks in Oklahoma for many, many years. …

That is something that all insurance agents and brokers need to be talking about with their clients in our area, dotting their “I”s and crossing their “T”s, related to making sure that they know that earthquake coverage is available. …

I believe the premiums in Oklahoma are less than six million dollars total for the entire state that is placed in earthquake. But consumers, we have to do a better job at the Oklahoma Insurance Department, partnering with our friends that are in the business through the independent agents association and the captive agents, to be able to have them talk about the need and bring that awareness to clients, because now it is at the forefront. …

In Oklahoma it’s not a matter of if; it’s a matter of when. … Our agents do a wonderful job of preparing their clients. But earthquake insurance is something that we have to bring to the forefront of their minds. It’s something that we have to do a good job of. We’re working to put together some public service announcements.

But it is a factor now, and none of us know when the next one is going to come. But we do know that we have a tremendous amount of activity.

Some of the markets from around the world are beginning to look at Oklahoma to place that coverage. I think they’re doing some risk mapping and some underwriting analysis. … We have a very vibrant market currently, and I believe that that will expand in the future.

IJ: Speaking of vibrant market, you have implemented a program to increase the availability of insurance coverages in your state. Could you describe that program and its effectiveness?

Doak: Sure. It works hand-in-hand with our new governor of Oklahoma. Gov. Mary Fallin is really promoting “Open for Business” in Oklahoma.

We believe that, from our geographic location, from the East Coast to the West Coast, Oklahoma is a good place to do business in.

We are … reaching out to the companies around the country and letting them know that we, being a new regulator and being one of the few that have actually ever sold a policy or worked with a client across the dinner table to across the board room, want to deal with the insurance companies fairly. We want to assist them in their business needs, and we’re very appreciative of them offering their coverages to our consumers. …

Oklahoma is well positioned to have insurance companies think about re-domiciling here with our business-friendly environment.

One of the things is that we don’t fall short on the consumer protections in Oklahoma. But we do think that a lot of people are going to be looking at us, possibly, as a new domicile.

IJ: Oklahoma has implemented tort reform and workers’ comp overhaul in the past year. How have those reforms affected the insurance markets in your state?

Doak: Well, in the first time in recent history working with NCI, Oklahoma, the insurance workers’ comps market is going to be getting a decrease, which has already taken effect. We’ve already approved that rating.

We believe that some of the impacts related to the work comp reform, it’s going to take a little bit for those to take a hold. We have an outline of that, I believe, out on our website.

But we need to continue the job in Oklahoma. We need to continue the reform. I think this year at the legislature … some of the folks are going to bring up the Texas opt out for workers’ compensation.

We need to put Oklahoma on a level playing field with our surrounding states regarding workers’ compensation. It’s one of the highest in the country on certain aspects. But we believe that the reform which came in with our new governor and our new legislature, that those reforms are going to continue. It’s very, very important for our viability as a state.

IJ: Going back to healthcare reform, the HHS, Health and Human Services, has declined to take the recommendations of the NAIC to modify the MLR, or medical loss ratio, as it relates to agents and brokers. How do you see that ratio affecting agents and brokers in your state?

Doak: I believe that consumer protection is handled best by a licensed insurance agent and broker, and this piece of legislation is basically to take them out of the equation. It’s something which we’ve asked for a waiver, which ours is in progress of. Recently, we’ve seen some of the decisions that have come down relating to some of the other states that have asked for the waiver and have been denied.

Oklahoma’s is still in process, but that is yet to be determined. But I do believe that that is a very, very critical piece of legislation and is something that needs to be discussed, and there are many people on both sides of that issue. …

The role which an agent or broker plays is very, very critical and it is the front line of consumer protection. I’m very proud of that group, and I believe that they should be compensated for that role.

IJ: Please discuss your CAT team and work on natural disaster response.

Doak: We’re very proud of that in Oklahoma. When I came to office, there was nothing really in place at the insurance department to be able to have a link with the insurance community with your major carriers for natural disasters. …

My chief of staff is a FEMA certified instructor, Paul Wilkening, and we’ve reached out. We have Farmers Insurance, Kim Decker, who helps lead the CAT team from the industry side, along with John Wiscaver of Oklahoma Farm Bureau. We have two seasoned professionals and about 20 other folks that are participating in this.

The outcome of this is going to be on March 12th through 13th. I believe it may be March 11th, 12th and 13th here in Oklahoma City. We’re going to have the first annual National Tornado Conference, and it’s something that we want to tell you more about and tell your readers about. But it’s going to be a summit which we can deal with the claims side of things. Regulators will be invited. Vendors will be invited. We’re going to have some breakout sessions for law enforcement.

Again, our state is very well-versed in handling natural disasters. It’s something which we need to be more on top of, and related to all the states that have been impacted by this this past year, from Joplin, Missouri, to Tuscaloosa.

Again, our heart goes out to those folks that have lost lives in those. But we want to do a good job here in Oklahoma, and we feel like this may be a way for us to put a flag in the ground and say that … we deal with this.

We have more tornadoes per square mile than any other state, and we feel that we should be now having an annual discussion about how to better serve the consumers, not only in Oklahoma but around the country.

Topics Catastrophe Legislation Agencies Workers' Compensation Oklahoma