Georgia’s Oxendine Defends Main Street Agents in Compensation Battle

March 5, 2007

Georgia Insurance Commissioner John Oxendine, who was recently elected to his fourth four-year term, thinks Main Street insurance agents are being treated unfairly in the debate over agency compensation and isn’t afraid to say so.

“Insurance agents, especially the local neighborhood agent, they’re really, really getting a raw deal on this. I will tell you as the advocate for consumers in the state of Georgia my number one ally is that local neighborhood Main Street agent. They’re the one out there fighting for the little guy,” says the Georgia official in a video interview with Insurance Journal.

Oxendine was asked about agreements signed by Zurich and other insurers that ban traditional contingent commissions and affect agents in Georgia and other states, even though Georgia officials are not party to the settlements.

“There is nothing inherently wrong with a contingent commission. It’s a bonus. All a contingent commission is, is a Christmas bonus. What is wrong is when individual large brokerage firms and companies working with those firms misuse the principle of contingent commissions, and that’s what happened. It was individuals [that] misused it. You don’t punish the innocent; you punish the guilty,” maintains the insurance chief.

Oxendine spoke with Insurance Journal’s Andrea Ortega-Wells at the winter meeting of the National Association of Insurance Commissioners in December. The complete video interview is available at www.insurancejournal.com/broadcasts, in the video section of the Web site.

In other remarks in the interview, Oxendine said he thinks his state’s property and other insurance markets are in better shape than those in other states.

“We’ve been very fortunate in Georgia to maintain a good competitive market on our coast. We don’t have the historical problems that a lot of other states have. Therefore, we only allow companies to use historical data in rating information. We don’t allow the hurricane models that are used in a lot of other states. We want to keep a good competitive market. We want the agents to be able to serve their customers and be able to place that business,” he explained.

He said insurance buyers are the beneficiaries of the state’s competitive markets. “We have the lowest [rates] in the southeast. Our homeowner’s rates are by far the cheapest, the most competitive market. Our automobile market is the lowest of all of the 10 large states. Actually, Illinois and Georgia about tie for having the lowest of big states around the country. Our workers’ comp market is one of the most competitive. It’s the most competitive in the South, so we’re very happy about that,” he boasted.

In the interview, Oxendine also discusses the role of state attorneys general in insurance issues, election of commissioners and recent regulatory decisions.

Topics Agencies Talent Georgia

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