Insurance executives in Mississippi have a keen eye on Senate Bill 2807, touted as the “Building a Better and Stronger Mississippi Act.”
Because passing legislation establishing a new statewide building code would be “too hard of a sell,” industry lobbyists favor legislation that would set up building codes for the eight southern-most counties, plus Forrest and Lamar counties.
“It’s going to require a good bit of study on the House side, but I think it’ll still pass because everybody’s sympathetic to the people down there,” said Buddy Oliver, chairman of the legislative committee for the Professional Insurance Agents (PIA) of Mississippi. “We’re supportive of it.”
Senate Insurance Committee member Mike Chaney (R-Vicksburg) sponsored the compromise bill, which was referred to the House Ways and Means Committee on February 15.
“So many insurance companies are watching this bill very closely and want it to pass because they may be up in Cincinnati or New York trying to write coverage for a condo or casino on the Mississippi Gulf Coast,” explained Richard Davis, president of the 250-member Independent Insurance Agents of Mississippi (IIAM). “If it’s been built under new city codes, they know what they’re insuring. If it’s not, they’re hesitant.”
Senate Bill 2014, which would require homeowners to sign a document indicating their wish not to purchase flood insurance, is gaining legs.
“We’re very supportive of the bill but there are some problems with the mechanics of it,” said state insurance commissioner George Dale. “For example, who handles it: the agent or the company? Does the insured need to sign the form every year? It’s a work in progress, but we’re very much in favor of the idea of the bill.”
Several years ago, a similar situation surfaced concerning required documents for uninsured motorist coverage, recalled Oliver. “The problem we run into is that people don’t remember signing the form,” he said. “Even though we have everything on computer and can show a signature, they’ll come back with, ‘well, I just don’t remember doing that.’”
Still, it’s the best way for customers to be aware of the flood exclusion, said Davis. “It makes clear their understanding of it,” he said. “When a customer takes out a flood policy, they come into our office and then everything’s handled direct bill, so every year after that, something needs to come from the company with a stamp, such as ‘no flood coverage.’”
Prompt pay legislation, requiring payment on claims from insurance companies within 90 days, probably won’t pass, said Oliver. “It’s difficult to mandate to an insurance company what they have to do, even though I agree it should be taken care of in a timely manner,” he said. “But there are other factors that delay payment. For example, my sister and brother-in-law are having to put a roof on their house that was damaged by hail in June before Katrina hit in August. The delay is not because of the insurance company. It’s because my sister can’t make up her mind what color shingles she wants. Plus, roofing now has gone sky high and roofers are just about as busy as they can be.”
The legislation (House Bill 1321) would deter companies from coming into Mississippi’s already fragile insurance market, said Davis. “We’re trying to attract them,” he said. “A national company that only counts Mississippi as one percent of its business may say, ‘We’ve been through hurricanes and tornados the last few years, so forget it if the state puts another restriction on us.’ Truthfully, I’d rather be paid within 15 days because if the company doesn’t pay my client, I hear about it. But when you have a catastrophe like Katrina, it takes a while because some things are out of their control. After Katrina, it took some adjusters 30 days to get here because they had a hard time finding hotel rooms and gasoline.”
Dale said it wouldn’t hurt to take a look at prompt pay guidelines for property insurance. “We already have a bill that offers guidelines as to how much time a health insurance company can take and it works well,” he said.
Senate Bill 2332, dubbed the “Mississippi Consumer Protection Act,” which would prohibit rate increases on auto insurance for active military personnel, is probably headed to the governor’s desk. The PIAM and IIAM support it.
“That bill was important because military personnel need auto insurance when they return from duty,” said PIA of Mississippi executive director Ann Sturdivant. “They don’t have insurance while they’re gone, and then when they apply for it again, if they’ve had a lapse of insurance, nobody wants to write it. This bill will protect them.”
Many industry bills, including a spate of them originating in the House Katrina Task Force, are administrative in nature, Dale pointed out. “We have an interest in the public adjuster bill,” he said. “Mississippi has never recognized public adjusters in the past. The attorney general issued an order to us to recognize and register but not regulate them. So we, in support with a group of folks who want to be sure that public adjusters are regulated, introduced legislation to license public adjusters with certain guidelines. That bill is struggling as we speak.”
On the national level, the proposal for a federal insurance commissioner is not gaining favor in Mississippi, said Oliver.
“We don’t need to see regulations and control from the federal government,” he said. “We want to keep it at the state level. I think we can all see how the feds messed up handling Katrina.”
Contact MBJ contributing writer Lynne W. Jeter at Lynne.Jeter@gmail.com.