Georgia Commissioner Has State on the Right Track
Georgia Insurance Commissioner John Oxendine has seen a number of changes in his department in his nine years in office. With three years left to serve, Oxendine hopes to see even more improvement as the department reaches out to both policyholders and agents. Oxendine recently set aside time to talk with Insurance Journal about how the department is doing, what the challenges have been, his thoughts on independent agents and more.
Insurance Journal: How do you view the current insurance market in Georgia?
John Oxendine: Georgia has one of the overall healthier markets in the country. Obviously, med-mal is not good, but that can be said for many places. Commercial liability and long-haul trucking are also problem areas. We actually have one of the best workers’ comp markets in the country. We have good benefits, some of the lowest rates and we’re very proud of that. Our homeowners has gone up in Georgia but is still the lowest in the entire south. We’re seeing 10 percent increases and everybody else is seeing 20 to 30 percent increases.
IJ: Why do you think the workers’ comp market has been successful in Georgia?
Oxendine: When I was elected, one of my campaign promises was that we were going to reform workers’ comp. We had a terrible situation with the assigned risk pool and the subsidies required for it. We made the assigned risk pool self-supporting in Georgia and the population is obviously very low. We have a very competitive market — everybody wants to write workers’ comp in Georgia because we don’t have an assigned risk pool assessment. It is really just a very fine, healthy market to write in and that keeps the prices down. We’ve reduced prices in the last eight years 40 percent and increased benefits about 30 percent.
IJ: Looking at homeowners insurance, is mold as big an issue as it is in some other Southern states?
IJ: What do you see as the key or keys in 2004 for keeping and bringing more insurance companies into Georgia?
Oxendine: I think insurance companies want a fair regulator and that’s what I try to be. I’m very much of a consumer advocate and I fight very hard for the consumer. Companies know if they mistreat consumers in the state, I’ll be all over them. However, companies know too where I’m coming from and I’m upfront and honest with them. I’m rather predictable and I’m fair to you, but you treat the consumers fair and I’ll treat you fair. People are okay with that and they like the stability. I’m elected and in my ninth year, so I’m kind of guaranteed the rest of my term will be 12 years in office. That is 12 years of stability with one commissioner. The problem with some of the appointed states is that every year or two you start getting new insurance commissioners and the industry doesn’t know how to react to that change. Even if the commissioner is not perfect, if you have the same one over and over, you know whom you’re dealing with.
IJ: What has been the biggest challenge for you or your department since your time in office and what is your biggest satisfaction?
Oxendine: The biggest challenge and it has been in recent years is the problem with commercial liability, specifically the med-mal area. Healthcare too is in there. Most of our healthcare problems though are areas we don’t regulate. Workers’ comp is what I’m most pleased with. When I took office in January of 1995, we had one of the worst workers’ comp markets in the country. I think our state has been a role model for workers’ comp. I’m not losing sleep at night over workers’ comp.
IJ: How has the department fought fraud?
Oxendine: We’ve been very aggressive and put a lot of teeth into our fraud unit over the years and greatly increased our arrests and indictments. We have a full, certified police force in Georgia which some states do not have. We also passed a new law this year that went into effect in July and it mainly concentrates on all types of insurance fraud. The unlicensed healthcare provision was put under the fraud section of the code. This new fraud law is one of the toughest in the country.
The National Association of Insurance Commissioners has been looking at it as a possible model. It applies to any unlicensed insurance entity, however it was healthcare entities that sparked the motivation for the law. Anyone in the food chain … if you hand out a brochure about a unlicensed entity, if you talk to somebody about it, if you’re the receptionist and talk on the phone to someone about it, if you opened the mail and they mail a check or application for an unlicensed product and you receive it, all of those things, you have committed a felony under Georgia law. To my knowledge, this is the toughest law in the country. We’re sending the message out that you better go to another state or you’re going to go to jail.
IJ: Do you favor state or federal regulation of insurance?
Oxendine: I think federal regulation would be the worst thing for the consumer in Georgia and actually the worst thing for insurance companies. The consumer would not get the hands-on treatment they get in the state. When people call my office, they’re really devastated. They don’t call because of a fender bender. They call because they have a major accident, a death claim, a $500 medical bill they can’t get paid, their house burned down. They’re desperate and they really need help. We help them through the process. We’re open until seven at night. We have real people answer the phones, not machines. The federal government isn’t going to do any of that. The consumers who already don’t like insurance or insurance companies are going to become more frustrated and where central government regulation works in Europe, it will not work here because we have trial lawyers and Europe doesn’t. With our trial lawyer environment in this country, I think to have federal government regulation will simply invite more lawsuits because consumers will have nowhere else to turn.
IJ: How important are independent agents in the insurance process?
Oxendine: My view is whether it is a captive or independent agent they are the number one friend consumers have. They’re my partners as a consumer advocate. They’re the ones out there fighting for the consumers every day. We need to keep that system. I’m really not a fan of the Internet and calling 800 numbers to get service. There is no better tool than having the local, friendly neighborhood agent. The independent agent that has several companies to choose from, they’re going to give you a choice of different companies. That agent has a financial interest of taking care of consumers. If you don’t take care of that person, there is another agent on the next street corner who will be happy to.
IJ: Talk a little bit about your relationships with commissioners in fellow Southern states?
Oxendine: The Southeast is pretty famous; actually, I think some of the other zones resent us because we’re pretty close-knit. We kind of stick together and talk to each other a lot. We have two retreats together where we go off and meet among ourselves. We also get together at the NAIC quarterly meetings. The South is unique and tends to stick together more than any other part of the country.
IJ: What do you see in 2004 for the industry as a whole?
Oxendine: I think it looks very good and 2004 will be the year of recovery from the terrible setback of 9/11. The key is to make sure we keep state-based regulation in the future. I think the next few years will be very important in that process.
For more information on the Department, visit www.inscomm.state.ga.us. To comment on this story, e-mail: dthomas@insurancejournal.com.