The election for California Insurance Commissioner is a weighty one. The person selected will be in charge of regulating the approximately 1,500 insurance companies doing business in the state. Assemblyman and Republican Mike Villines recently shared his views on workers’ compensation, fraud, catastrophes, and why he would use the position to help keep insurance rates low and grow California jobs.
Villines was elected to the California Assembly in 2004 to represent the counties of Fresno and Madera. He serves on the board of the State Legislative Leaders Foundation, a nonprofit independent national organization that provides educational and enrichment programs for leaders of state legislators, as well as on the board of the Sen. Kenneth L. Maddy Institute for Leadership and Ethics at California State University, Fresno.
Prior to serving on the Assembly, he was an aide for former Gov. Pete Wilson, a chief of staff to former State Sen. Chuck Poochigian, and a small business owner as a public relations and communications executive for six years.
Consumer groups have criticized Villines for being too closely aligned with insurance companies, but he notes he has taken no money from insurance companies and touts his record as an independent, pragmatic businessman who will put the protection of consumers first.
In 2006, he was elected to serve as Assembly Republican Leader, a position he served for more than two years. But he was forced out of the position because he broke party ranks in 2009 by agreeing to taxes to close the state deficit.
“I’m a former business owner … That’s one of the reasons why I want to run for this seat,” Villines said. “The insurance commissioner in California’s job is a nonpartisan job. It really isn’t a Republican/Democrat job. It’s a business person’s job and there are some very specific deeds you’re supposed to do. I’m somebody who’s approached my experience in government as somebody who has always delivered for the constituents, delivered for the people, cut through a lot of the politics. Sometimes that makes me the hero, and sometimes I’ve been the heel, but … here’s a guy who’s independent who has always put the voters first.”
Villines said if elected, he plans to protect consumers, keep rates low, protect solvency and ensure freedom of choice in insurance. He doesn’t believe consumer and business interests are necessarily in conflict.
“Ideally, you get to a spot where everybody sort of gets what they need. In business you really have to be careful to negotiate what’s good for both sides. … you bring everyone to the table … get everybody there and work through finding what’s the best solution for everybody and then moving forward,” he said. “I’m a pragmatic person, who thinks that’s the way you need to run this job. It’s not a philosophical job; it’s a kind of day-to-day working out the problems that you hope may take care of consumers and hopefully businesses can have the environment to compete and thrive. … We should all be partners so we can create more jobs [and] get more products on the street quicker.”
On Villines’ list of priorities are to combat insurance fraud, implement efficiencies so new products can reach the market more quickly, and address workers’ compensation insurance and earthquake insurance rates.
Insurance fraud costs every Californian an average of $500 per year. Villines said he’d like to cross-share information with law enforcement and motor vehicle officials, and leverage technology to go after those who are committing illegal acts.
He’d also like to see rates and new products approved more quickly, which he’d do with an improved customer service approach at the department. He said California is notorious for taking a year or more to approve new products, when some states do it in 60 to 90 days.
“When someone wants to reduce rates, we should approve that right away, get that done and quickly move through the process. … That is really a healthy thing for the state,” he said. “It’s good for a agents and brokers to be able to offer more choices and better service to their clients.”
Like his opponent, Villines believes the 27 percent rate increase sought by workers’ compensation insurers “would devastate small businesses.” The industry needs to consider what’s reasonable, he said. “Is it 27 percent? I don’t think so. That shows a disconnect with reality and the economy.” A rate hike that large would mean employees would be out of work and out of insurance, he noted.
Villines said he would work to keep rates as low as possible, but if rate increases are necessary, he would first communicate with small businesses so they understand why an increase is important. Second, he would not raise rates without trying to reduce inefficiencies. “If workers’ comp rates need to go up, then we need to see corresponding reforms on fees,” he said.
Villines said earthquake insurance needs to be made more affordable as well. “We need to do a better job in creating a competitive structure for earthquake insurance,” he said. “It’s a very technical and difficult issue to solve, but I would like to find a way to rely less on reinsurance, and have more competition in the market in heavily concentrated earthquake zones.”
The next insurance commissioner will be charged with implementing national health care reforms. Villines said he wants to give Californians more affordable health care choices by, among other things, allowing them to shop for insurance across state lines. He also wants individuals and businesses to have the ability to decide what benefits are included in their health plans
Ultimately, Villines said his decisions will be “tough but fair,” as well as consumer-driven, with an eye on economic recovery. “There are over 300,000 insurance-related jobs in this state, and we need every single one of them,” he said, noting California’s nearly 13 percent unemployment rate. “Those who employ people and are out in the front lines should be complemented for their hard work.”
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