Rounds and Rounds We Go

By | May 17, 2004

It was a weekend in early 2002 and Pierre, S.D.-based agent Michael Rounds was having trouble sleeping. He tossed and turned and started to feel sick to his stomach. All the bed-hopping was making it tough for Rounds’ wife to get some sleep, and she finally asked her husband what was the matter.

“I’ve got to run for governor,” he said. Most insurance professionals lose sleep at night trying to stay out of political entanglements, not trying to get more deeply entangled. But in this way and many others, Rounds is a special individual. Not only did he campaign for and win the governorship of South Dakota after a stint as the state’s Republican Senate majority leader, but he has made insurance modernization reform a priority in his administration. We hope you enjoy our exclusive look at this fascinating and talented individual on page 12 of the Midwest section.

Whatever else might be said about politicians, they need to be good communicators in order to succeed. Insurance companies, on the other hand, have not always (to put it mildly) been noted for being the best communicators—with their agents or with the public. This is particularly true when the issue is the use of credit scores in rating and underwriting. Michigan Gov. Jennifer Granholm has joined her Missouri colleague Gov. Bob Holden in pushing to ban the practice as used in the auto and homeowners insurance lines (see page 8 for story).

Now carriers are back on their heels and in trying to defend insurance scoring they argue that well more than half of the Wolverine State’s insurance consumers will lose out on an insurance scoring discount. But because of carriers’ poor communication with agents about how they use credit in their rating and underwriting, it’s unclear how many insureds are aware of the consequences of banning the practice and consequently motivated to protest it. There are rumblings now in Maryland to overturn that state’s ban on insurance scoring in the homeowners line after many consumers complained about their rates going up. But this outrage occurred only after the ban passed. If carriers don’t get their ducks in a row, Michigan may follow the same course.

Elsewhere in this issue—which will be distributed at the American Association of Managing General Agents’ (AAMGA) annual meeting in Scottsdale, Ariz., May 19-23—West Managing Editor Dave Thomas takes a look at how MGAs are using technology to make life easier for retail agents in a rush to place hard risks in niche markets. Meanwhile, National Editor Andrea Ortega-Wells talks with outgoing AAMGA President Ronnie Moore about the group’s accomplishments in the past year. Lastly, incoming AAMGA President Joe Hutelmyer writes that the softening market shouldn’t change MGAs’ focus on sound customer service and solid relationships. Those commitments, he argues, should apply regardless of where we are as we go round and round in the cycle game.

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Insurance Journal West May 17, 2004
May 17, 2004
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