PCI’s Csiszar, Panelists Discuss Sarbanes-Oxley, TRIA Concerns

The Property Casualty Insurers Association’s Joint Marketing and Underwriting Seminar, held April 17 in St. Petersburg, Fla., had a baseball motif, “Hitting a Grand Slam with Marketing and Underwriting Tools and Tips.”

Monday’s general session featured a “Play-by-play Commentary: The Latest Dialogue Between Regulators and Industry,” during which fast-balls, curves and sliders were thrown at insurance commission spokesmen from Florida, Georgia and Nebraska by Ernie Csiszar, PCI president and CEO — each responded by slamming the pitches out of the stadium as the audience hung onto every word.

Csiszar didn’t mince words, throwing rapid-fire questions at John W. Oxendine, Georgia Commissioner of Insurance; L. Tim Wagner, director, Nebraska Department of Insurance; and Dr. Ray Spudeck, senior research economist with the Florida Department of Insurance.

Csiszar said the main topic of interest at the Atlanta PCI board meeting was the Sarbanes-Oxley Act of 2002. Csiszar asked Oxendine what needs to be done and what should be done on the Sarbanes-Oxley Act.

“Sarbanes-Oxley is a great piece of legislation, the problem was that it was passed in a record time,” Oxendine explained. “I don’t know if Congress has ever passed a piece of legislation that fast.

“I sometimes wonder if they really had time to think through the details,” Oxendine said. “I think Sarbanes-Oxley is a situation in which a few details were not thought out.”

Oxendine voiced reluctance to see Sarbanes-Oxley applied across the board to the entire insurance industry.

“It is unfortunate that it is applied to some insurance companies and not others,” Oxendine said, “but I don’t think you address that problem by applying it to every single insurance company.

“Maybe what you should do is look and see if there are ways that Sarbanes-Oxley should be made a little more realistic,” Oxendine commented. He supports the goal 100 percent, but said it’s necessary to let companies be companies, let them make a profit, let them serve their mutual policyholders or corporate shareholders and Sarbanes could perhaps be altered to make themselves a little more feasible and not be such an administrative burden.

What to do about TRIA?

Csiszar said there are those that feel as a matter of public policy that the TRIA act should simply be renewed; there are those that feel that as a matter of public policy the act should be renewed, but only on condition that the private sector provide the ultimate solution to the terrorism risk issue; and there are those that feel that nothing should be done it should be allowed to expire and just simply go away.

Csiszar asked Wagner for Nebraska’s point of view.

“Both of our U.S. Senators have been sponsors and are introducing legislation to continue TRIA,” Wagner said. “It is inconceivable to me that we can develop a short-term scenario a systems whereby we can handle risks and demands of the magnitude that will be presented within the private sector.

Spudeck comments

“It is hard for me to be objective about this issue, having been in New York when this happened,” Spudeck commented. “When these events happen you get a real sense of what it is the government can do, what insurance companies can do and the plight that individuals are in that are in those areas.”

He said that if you talk to the average person on the street their reasonable expectation is that when something bad like that happens insurance is there to cover for that.

“Granted, it is hard to find a sufficient sample to give empirically credible evidence to the actuary for rate making purposes and everybody hopes we never get that kind of quantity of data,” Spudeck said. “But other than that, there has to be a reasonable split between requiring that or not being able to exclude that type of insurance and yet being able to earn a rate on it. We are working to find that balance, that solution.”

Other topics discussed:

Other topics discussed included tax issues, solvency, oversight and asbestos. A mid-afternoon session focused on “Building an All-Star Team: Bridging the Gap Between Home and Office Agents,” moderated by Al Dees, MetLife Auto & Home Group national sales and marketing manager.

This morning, discussion will focus on developing in-house talent; building a customer-focused organization; unlocking potential and finding victory in change management; the latest in motor vehicle telematics; and the emergency of identity theft coverage. Activities wrap up at noon with a marketing committee meeting and lunch.

Topics Legislation