Workers’ comp tug-of-war

A political tug-of war is now taking place in South Carolina involving Gov. Mark Sanford, Insurance Commissioner Elanor Kitzman, legislators and insurance industry representatives. The governor has responded that he supports Kitzman, an 18-year insurance veteran who founded Driver’s Choice Insurance Services in 1998 and sold it in 2002, two years before being appointed as commissioner by Sanford.

An Associated Press news story appearing on www.insurancejournal.com even resulted in a free-for-all in which that story was criticized, followed by opponents lining up to attack each other. Kitzman’s opponents, Frank Knapp, chief executive of the South Carolina Small Business Chamber of Commerce and John Ruoff, research director for South Carolina Fair Share, a consumer advocacy group, both complain that the insurance industry is applying political pressure, which makes the state favorable for insurance interests and unfavorable for consumers.

The insurance industry is being painted with a broad brush as a profit-motivated industry out to take advantage of consumers.

Commissioner Kitzman, since being appointed by the governor, has been walking a fine line between the insurance industry and consumer groups, and has found it impossible to please either. She recently said the department “takes its regulatory responsibilities very seriously and fulfills both its statutory obligations to see that the insurance laws of the state are faithfully executed and its mission to protect insurance consumers, the public interest and the insurance marketplace.” Consumers, she said, benefit from a healthy competitive insurance environment that’s been created.

The controversy, which now involves the governor, politicians, trade groups, consumer groups and even the Senate Banking and Insurance Committee, is getting out of hand and creating an unhealthy environment.

The question here isn’t if the department is succeeding in its mission of protecting the public interest, the interests of insurance consumers and the insurance marketplace through its regulation of the insurance business.

The controversy is overshadowing and avoiding the real question, what can be done to improve South Carolina’s workers’ compensation system. Everyone involved is embroiled in questioning and tearing apart conscientious public servants who have been and are attempting to improve the workers’ compensation system. Changes like this, even with positive cooperation and support of everyone involved, are impossible to accomplish in any one legislative session.

Instead of calling for investigations into how various officials are doing their jobs, a study should be initiated about what workers’ compensation systems are working and why. This involves not only South Carolina’s politicians and the insurance commissioner, but should also involve other workers’ compensation officials in states like Florida and West Virginia, in which the system is working.

No one has a perfect system, but it’s better to attempt to positively create a system that works–neither the consumer or the insurance industry will benefit from efforts to tear each other apart and promote a one-sided approach.