Maintain a Clean Image

Data on damages from the four hurricanes that hit the southeast shows that records have been broken, but human actions are causing more and longer-term damage.

Speakers representing the insurance industry and insurance commissions gave opposing views at the Society of Insurance Research (SIR) Annual Conference in Atlanta. National Association of Mutual Insurance Companies (NAMIC) representatives David B. Reddick, Peter A. Bisbecos and Joe Thesing said lawsuits in several states are viable, but cautioned regulators to “stick to business,” investigate and prosecute criminal acts, but avoid industry-wide witch hunts to further their political aspirations.

“In times of disaster the insurance industry is supposed to shine, and your industry did,” Alabama Insurance Commissioner Walter A. Bell said, congratulating the industry for doing a good job during the hurricanes.

Bell was one of three SIR panelists, including Georgia Commissioner John W. Oxendine and Louisiana Commissioner J. Robert Wooley, to discuss “The Regulatory Environment — Untangle So You Can Work Smarter.” All three commissioners and Mississippi Insurance Commissioner George Dale, in Atlanta for a National Association of Insurance Commissioners meeting, acknowledged insurance tax money finances state commissions and is a major part of monies deposited in state general funds.

The NAMIC spokesmen attribute a lot of what has been going on as grandstanding. During interviews with Insurance Journal in Atlanta, commissioners said they would closely watch what happens in Florida. They have been taking a closer look at the insurance companies in their states, but are not anticipating wide-spread investigations.

As this issue went to press, Florida’s moratorium ended and state agencies were closely watching to see how many policyholders would be dropped. As indicated in breaking news on the Insurance Journal Web site, www.insurancejournal.com, several large insurance providers have stopped writing new policies in Florida. At the same time, Citizens Property Insurance Corp., the state-sponsored insurer or last resort, is being pressured by new applicants and is about to adjust its rates to meet state requirements (see page 103).

Everyone should apply the proverbial “Don’t kill the goose that lays the golden egg.” Consumers need insurance protection, state insurance commissioners and state general funds need the tax money and insurance companies need customers — it’s a win-win situation, but everyone involved needs to walk a very fine line. Insurance companies take years to develop a customer base, if they pull out of a state, then the independent agent is hit, and the black eye takes a very long time to heal. Attorneys general and commissioners should be careful not to use the insurance industry as a “whipping boy,” this tactic is sure to backfire, and when it does, their political aspirations could be destroyed instantly when the voters attribute their tactics as politically motivated.

Topics Florida Market