There is agreement that the solutions to improving the affordability and availability of home and commercial insurance in Mississippi are extremely complex. But the two candidates facing off to become the state’s top insurance regulator agree on little else.
In a recent debate in Jackson sponsored by the Stennis Institute for Government, Democrat candidate Gary Anderson (www.garyanderson.com/) said his opponent, Sen. Mike Chaney (www.chaney07.com/), can’t be trusted because he promised to vote to increase the tobacco tax and then voted against a measure that would have allowed the issue to come up for a vote. Anderson has also criticized Chaney for taking campaign contributions from insurance agents.
Chaney says he has taken contributions from individual agents, and found that necessary because of the major costs of running a statewide campaign. Chaney says that the large role prominent trial lawyer Dickie Scruggs played in defeating incumbent commissioner George Dale in the Democratic primary leads to concerns that Anderson, if elected, would be a pawn of trial lawyers. Chaney said some insurance companies have told him they will stop doing business in Mississippi if Anderson is elected.
“It has turned into a negative campaign, unfortunately,” Chaney said. “The debate at the Stennis Institute was not about insurance issues or what to do to reduce rates, but how I voted on the cigarette tax. The issue is about reducing rates and having available, affordable insurance that is reliable for all the people in Mississippi. We need to be talking about issues.”
Chaney said it is unfair for Anderson to criticize him for being in the pocket of insurance companies when Anderson is in the pocket of one personal injury attorney.
“You can’t let personal injury lawyers control that office,” Chaney said. “What would happen is all the reinsurers for Mississippi would pull out. A month after that people would figure out they can’t buy insurance in the state. It would be like a snowball rolling downhill.”
Anderson said earlier in the campaign Chaney chastised Dale for taking campaign contributions from the very people being regulated.
“But then when we looked at Mr. Chaney’s campaign financial records, right during the same period of time he had just taken a big check from an insurance company,” said Anderson, who has pledged not to take campaign contributions from the insurance industry. “I really do believe the next insurance commissioner has to be someone the voters can trust and someone who can assure the ratepayers of the state can get a fair deal. Character is certainly a trait we have to make sure we have. People in Mississippi don’t want people making promises, but people who keep promises. People want to see real results.”
“I don’t have a Dickie Scruggs in my back pocket, so I have to get out and pound the pavement,” Chaney responded. “Personal trial lawyers are just that, trial lawyers, and their goal is to make money. I’m taking money from insurance agents. I don’t see them as a problem. They sell products in narrow price range given to them by companies.’
Chaney said he believes the more alternatives there are, the lower the price is to the consumer. Part of his plan is to post insurance company ratings on a Web site so people can make comparisons. He would require that policies be written in simple and unambiguous language. And he said he would crack down on adjusters who are trained to delay and deny claims as long as possible.
“I will tell companies they will be sanctioned to the full extent of the law if they don’t pay claims in a timely manner,” Chaney said.
Anderson said his strategy for increasing the availability and affordability of insurance in the state will be to recruit more insurance companies to the state to increase competition.
“So many insurers have moved out of the market because the market is unsettling right now,” Anderson said. “We have to recruit companies by telling them this $10 billion worth of insurance in Mississippi is worth having in your portfolio. I think when we properly sit down with insurance companies, and share with them that this economy in Mississippi is very vibrant, they would want to be part of the new development taking place in this state. I look forward to marketing the state to insurance companies to invite them into the marketplace. I think the State of Alabama does a good job of inviting competition which helps lower insurance rates.”
Anderson said he will also be very careful with statements he makes to make sure he calms the marketplace and invites more investment instead of raising fears about more catastrophic hurricanes.
“As insurance commissioner I’m not going to be prone to making statements that will keep the market unsettled because when you do that, there will always be the hedging that is taking place in market,” Anderson said. “Keep in mind that we have had only one catastrophic hurricane over a 36-year period after Hurricane Camille in 1969. It is not like we have a major hurricane every other year.”
Anderson said stronger building codes passed on the Gulf Coast should give greater comfort to the insurance industry in the whole marketplace. He also plans to crack down on fraud and abuse, and says that will give companies and ratepayers a better a comfort level for doing business in the state.
“Insurance companies will feel better because they will have someone out there making sure that fraud and abuse is not tolerated,” Anderson said. “Right now there is only one person in the Department of Insurance in the fraud unit who is responsible statewide. We know that person is very a dynamic person, but you can’t cover the state with one person. We will address that by beefing up that area.”
The insurance commissioner also doubles as the state’s chief fire marshall.
“I’m looking forward to increasing our fire fighting capability especially in rural areas to lower the number of fire deaths,” Anderson said. “I’m also in support of the burn center going in at the University Medical Center.”
Chaney said he doesn’t have a magic bullet for solving problems with insurance in Mississippi, which has one of the highest homeowner insurance rates in the nation.
“It is extremely complicated, and anybody who tells you they can solve it by selling a big book of business is wrong,” Chaney said. “It is very complicated and will take a lot of individual actions to bring about available, affordable and reliable insurance. It includes such things as implementing the Wind Pool insurance program to bring rates down so it is still an insurer of last resort, but so people can afford Wind Pool coverage. It includes implementing building codes on the Gulf Coast, which we passed in 2006. Building codes to build to Cat 3 hurricane are not that expensive to implement. They add less than 5% to the cost of a home. If a consumer builds to IBC/IRC codes, they can qualify for discounts from 11% to 29% on the insurance premiums for property and casualty side on fire, flood and other insurance except wind. The Wind Pool has not adopted a discount under wind mitigation, but it expected to do so.”
Chaney favors federal legislation that would propose an all-peril policy people could afford, but says he doesn’t know if that will ever be a reality.
“So as insurance commissioner, I would continue to push to provide means for private companies to write Wind Pool coverage at a discount at what would better than rates for the Wind Pool,” Chaney said.
He also proposes a Southern Gulf States zone coalition where states get together to prevent cherry picking by major writers to have coverage throughout the Gulf Coast area.
Chaney said there is sentiment by some people in North Mississippi that they don’t want to pay increased cost of insurance so someone living on the Coast can have an ocean view. But he says a major part of the state’s economy including ship building, oil refining and the seafood industry is based on the Coast.
“It is about an economy, not an ocean view,” he said.
Contact MBJ contributing writer Becky Gillette at firstname.lastname@example.org.