The high point of Independent Insurance Agents of Wisconsin’s (IIAW) annual convention in May was a lengthy speech from Jorge Gomez, the state’s new insurance commissioner.
A February 2003 appointee of Democratic Gov. Jim Doyle, Gomez spoke at the convention’s general session and tackled a wide range of regulatory issues though he did not make much news. He did voice his opposition to regulating the use of credit based on the National Conference of Insurance Legislators’ (NCOIL) model act, which has been passed in nearly 20 states in one form or another.
Gomez’s background is as a lawyer for a fiscal intermediary, a private firm and as an assistant district attorney. For some reason, Gomez didn’t talk much about his legal background and instead chose to tell about his father, whom Gomez said was the first Spanish-speaking life insurance agent appointed in Southern California by the captive insurer he worked for. Gomez said he understood what it took to succeed selling insurance, and what it felt like to fail.
The commissioner painted a fairly rosy picture of the state’s insurance market, citing its 10th-largest premium volume and 1,600 licensed insurers. “There’s a market of tremendous choice here, and also good prices.” There are 92,000 licensed agents in Wisconsin—though only about half that number are active—and the industry employs nearly 70,000 people, Gomez added.
Two property/casualty issues Gomez did broach in his speech were the use of loss-history databases such as CLUE in underwriting and insurance-based credit scoring.
“Some companies have treated inquiries as claims,” he said. “We’re beginning to see a significant impact because of that. We haven’t really been fully engaged with the face of the industry on this.” He did not say what regulatory action, if any, might be taken if the dialogue did not soon improve.
On scoring, Gomez said he had qualms about the use of no-hits in credit scores to, for example, determine that the frugal senior citizen with no debt is suddenly a bad risk. He also said he opposed pushing for adoption of the NCOIL model act on credit. The law, as passed by legislatures around the country, prohibits using credit as the “sole factor” in underwriting, rating or nonrenewal and bars taking into account no-hit credit records or medical bills.
“I’m not sold on the NCOIL model,” Gomez said. “There are a number of states grappling with this metaphysical question of what ‘sole factor’ means. The industry has not given great guidance on that. I’d rather try to get some sense of the industry voluntarily coming up with a half-dozen issues they’re not going to use. It’s difficult to enforce NCOIL, and I’m not interested in burdening business with a set of rules that are hard to enforce.”
IIAW President Bob Jartz told IJ “we like what we’ve seen from the new insurance commissioner,” though given Wisconsin’s harmonious past that should not come as a surprise.
“This is the antithesis of states where the industry’s seen as a political football,” Jartz said.
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