On the Saturday morning after the April 28th fire at the Ross Barnett Reservoir’s Main Harbor Marina, which destroyed dozens of boats on two piers, the Mississippi Business Journal caught up with state insurance commissioner and fire marshall George Dale, who oversees an annual budget of $6.75 million and 112 employees at the Mississippi Department of Insurance.
Dale was taking a break from mowing lawns, a side business he and his sons started several years ago. With his sons now grown, and a client list that includes several widows, Dale continues the Saturday service solo.
He had dropped by his home in Clinton to return messages, including one to a bricklayer with a disability claim, when he took a few minutes to talk to the MBJ about the new compulsory insurance law, the state of HMOs in Mississippi, nationwide trends in the insurance industry and the fire at the Reservoir.
“I’ll be out of town Monday and Tuesday to meet with the president of an insurance company in Dallas that writes specialty business – butane dealers, butane trucks, and so forth,” he explained. “They write a little business here, and I’m going to visit with them to encourage them to write more business in Mississippi. That’s something I do that not a lot of people are aware of — maintaining markets in Mississippi. People think that insurance companies are running over themselves to write all kinds of business in our state, but that’s not true. You have to work at it.”
Mississippi Business Journal: What do you estimate will be the effects of the new compulsory insurance law?
George Dale: Each time there’s major publicity on it, a number of people will run out and get insurance, which was the case right after the law passed. An insurance agent in Holmes County said that one Friday afternoon, between 3 p.m. and 5 p.m., 32 applicants bought car insurance because they heard the sheriff was going to have a roadblock that night! There’s a section of the bill that says you cannot stop motorists just to check their insurance card. On Jan. 1, 2001, when the law goes into effect, a certain number of people will get insurance, but unless there’s some effort to enforce it, I think it will probably drop back to close to what it is now. I hope I’m wrong.
MBJ: Do you think the new law will be sufficiently enforced?
GD: I’d very much like to see law enforcement officials, when they stop motorists for other possible violations, to request a copy of their insurance card. Then, at least people will know there’s random checking. Failure to do that will result in the bill not being vigorously enforced.
MBJ: What is your opinion of HMOs in the state? With the last one in the state leaving, why is it so difficult for HMOs to make it here?
GD: Mississippi does not have a population base that will support an HMO market. HMOs thrive on dense population areas, of which there are about three areas of the state that possibly could support some form of a properly marketed HMO. Of the 16 HMOs that came in here initially, only three are still in business and only one is writing any business. I think they probably under priced the product and violated the cardinal rule of insurance: If you are paying out more than you take in, you’re not going to stay in business.
MBJ: Do you foresee another HMO returning to the state?
GD: I could see a big business that had a lot of employees in the state of Mississippi, like an Ingalls or MCI WorldCom, possibly in a population area that could provide enough customers to make an HMO successful. Without that, I think it would be highly improbable for an HMO to make it in Mississippi.
MBJ: What insurance trends do you see nationwide and where does Mississippi fall in the mix?
GD: You’ll probably see more changes in insurance in the next three years than you’ve seen in the last 30. Not only will there be major changes in insurance itself, but even changes in how it’s regulated.
One, you’ll see a mass of mergers and acquisitions of insurance companies. Two, you’ll see changes in how insurance is marketed and the part the Internet plays. Three, you’ll see changes in the involvement of financial institutions — banks, credit unions, etc. — providing and selling insurance.
Throw in the mix the large number of insurance companies now that have foreign ownership. In foreign countries, the insurance company deals with an insurance czar for that country. When they do business in the U.S., they have to deal with 50 insurance commissioners. They’re not used to that. There will be a push by insurance companies with foreign ownership to more federal and less state regulation of insurance. Throw in some of America’s larger companies that would rather deal with one ape than 50 monkeys and they may support it, too. If that happens, you’ll see a move toward more federal regulation and less state regulation of insurance.
MBJ: What is your opinion of the new make-up of the state worker’s compensation commission?
GD: The jury’s still out, and we’ll be watching very closely the effect, if any, of Gov. Ronnie Musgrove’s first appointment to the workers’ comp commission and subsequent appointments he will make in the future, because that has a direct bearing on the availability and cost of workers’ compensation insurance in our state. One of the most successful things that happened in the Fordice administration was that he made good appointments to the commission and his office worked with my office and other entities in reforming workers’ compensation to the point that it made us a model for other states to copy. I hope that Gov. Musgrove’s appointments don’t undo that. If you read Sid Salter’s article a couple of weeks ago about the appointments, it hit the nail on the head.
MBJ: Hasn’t your office received more consumer complaints than ever on manufactured housing?
GD: Yes. It’s an aggressive trend pushed more by consumerism that ever before. Plus, the legislature has given me a bigger staff to supervise and regulate the manufactured housing and mobile home industry.
MBJ: Tell me about the Reservoir fire. How difficult is it to deal with multiple claims in a scenario like that?
GD: It will be almost impossible to adjust those claims. If a guy says my boat was burned completely up, but he had another boat somewhere else that wasn’t there at the time, how will we know whether it did or not? All that wooden stuff is on the bottom of the Reservoir. Multiple losses could possibly create a fraudulent act, but I’m hoping that won’t happen. And I’m sure it won’t.
Contact MBJ contributing writer Lynne Wilbanks Jeter at firstname.lastname@example.org, email@example.com or (601) 364-1018.