Mississippi Insurance Commissioner George Dale Serving Eighth Term
In public and in an interview with Insurance Journal, Misissippi Insurance Commis-sioner George Dale comes across as a laid-back Mississippi farm-boy, but the commissioner, who has been reelected for eight terms, has weathered many hurricanes, survived political back-alley fights and knows how to handle himself like a pro when he has to take the gloves off.
When Hurricane Katrina tore across southern Mississippi, it almost seemed like deja-vu to Commissioner Dale, who witnessed a similar battle in 1969 when Hurricane Camille came ashore, and thus had a good insight into what he would face after Hurricane Katrina devastated the state.
In Katrina’s aftermath, Dale faced a huge headache as loss estimates climbed in Mississippi and surrounding states, approaching the billions. But he didn’t foresee a political fight-to-the-death between Republicans and Democrats involving gubernatorial candidates, senatorial candidates and political wanna-bes.
After Mississippi began to dry out, Dale suddenly found himself on a slippery slide, between hundreds, if not thousands of local families, most claiming they had been told that they did not need federal flood insurance because their homes were not in a flood plain.
House Insurance Com-mittee Chairman Mark Formby, R-Picayune, was quoted saying he was “uncertain” what the legislature can do to help. He said he expected insurance companies to meet their “obligations,” but conceded that what those obligations are and the legal implications of “wind vs. rain,” would have to be worked out in court.
“I have a little bit of a problem trying to legislatively put demands on an industry that is still trying to react to what has happened,” Formby told the Jackson Clarion-Ledger.
During legislative committee meetings, led by House Speaker Billy McCoy and Rep. Ed Blackmon, D-Canton, it was suggested by U.S. Rep. Gene Taylor, D-Miss., that the federal flood program should be “retroactive,” and permit area homeowners damages to be covered by the program.
Taylor’s plan suggests homeowners pay 10 years of premiums, several thousand dollars for the average home, and receive federal money to rebuild.
Rep. Jessica Upshaw, R-Diamondhead, suggests the government needs to step in with a 9/11-type recovery plan to help homeowners rebuild.
Attorney general steps in
And then Mississippi Attorney General Jim Hood stepped in, filing suits on behalf of the state against five insurance companies: Nationwide Mutual Insurance Co., State Farm Fire and Casualty Co., Allstate Property and Casualty Co. and United Services Automobile Association.
In a suit that is still pending, Hood asks the court to remove the exclusions in insurance policies that prevent tidal surges from being covered. Hood and several other attorneys claim that the language in insurance policies is vague, misleading and ambiguous. Hood even claimed homeowners policies that exclude water damage from hurricanes violate the state’s Consumer Protection Act and deny policyholders of any “real” coverage.
Hood’s suit claims adjusters for Nationwide Mutual Insurance Co. and others asked policyholders to sign forms that acknowledge they sustained flood damage, which is not covered by homeowners insurance.
The at-torney general claimed adjusters cajoled victims to sign the forms, saying they were necessary to receive an immediate check for living expenses. “Then the companies can use the sentence regarding flood damage against policyholders later,” Hood claimed.
The response to Hood’s suit was instantaneous with Insurance Journal’s readers commenting at the bottom of the news article on www.insurancejournal.com, that the attorney general was a HOODlum.
The insurance industry responded immediately, carriers named in the suit and associations called the suit ridiculous.
Gov. Barbour, Dale defend industry
Dale and Governor Haley Barbour, spoke up to defend the insurance industry, maintaining that flood damages were clearly excluded, and saying that if a government body attempted to force insurance companies to pay for flood damage, not only would it chase them out of the state, it could even result in widespread bankruptcies.
The governor said he would prefer to negotiate with insurance companies to encourage them to help homeowners without flood insurance rebuild their property, rather than resort to a lawsuit that could encourage carriers to leave Mississippi.
“It’s crucial that people who enter into contracts keep their contracts,” Barbour told The Associated Press. “And that’s what an insurance policy is. It’s a contract.”
The governor said insurance companies “must be held to these contracts.” But he also said many people, particularly those who did not live in a flood plain, did not have flood coverage.
“For those people, we are working very hard so that if they don’t have insurance, or if they don’t have coverage, we can find a way to help them financially, help to make them whole,” Barbour said.
Dale maintained his position, saying insurance companies should not pay for damages excluded from the homeowners policies, and urged the carriers, when in doubt, to rule in favor of the homeowners.
Dale asked the Mississippi congressional delegation to seek a bailout plan.
The commissioner pointed out that the solution had to be a joint effort in which the insurance industry would take care of some, the flood insurance program will take care of others, but he said that there are victims who do not fall into either category.
Dale requested federal funds to hire structural engineers to investigate each and every disputed case.
Benton backed Dale, saying that if federal funds are not provided for the engineers, it would be in the best interest of the public for the Mississippi Legislature to provide the funds so the insurance commission could hire the engineers.
Taxpayers the answer?
Dale said the solution to everyone’s problem is to have the taxpayers “foot the bill.”
Dale suggests two solutions to hasten the Hurricane Katrina claims process: A mediation program to settle contested insurance; or a town hall meeting to bring insurance executives and coastal residents face-to-face. He told Insurance Journal he is unsure if either approach is practical.
What is practical, Dale said, is if mediation fails, the policyholder has to file suit against the insurance carrier.
“We’re quietly nudging, coercing, pushing and begging companies to pay more claims without making a big fanfare and not being able to live up to what we’re attempting to do,” Dale, 65, a Gulfport native, told the Clarion-Ledger.
Each day, the eight-term commissioner grapples with insurance companies that have paid more than $652 million in claims for toppled trees and missing roofs and homeowners left with a concrete slab near the beach.
He takes phone calls from angry voters, who received partial payments for houses destroyed by the Aug. 29 storm while meeting with insurance executives to ask for the highest payments possible.
The mediation program would be similar to Florida’s and bring policyholders and insurance adjusters into the same room with a Mississippi Bar-certified mediator. Dale said in Florida, mediation settled more than 80 percent of the claims.
Dale wants the legislature to approve stronger building codes and policyholders to sign waivers acknowledging any refusal to purchase federal flood insurance.
Many residents did not have flood insurance because their houses did not flood in Hurricane Camille in 1969, the worst storm Mississippi had seen until Katrina.
“Everybody made flood insurance decisions based on Camille,” Dale said. “Many got caught in an unusual circumstance.”
Dale stands behind insurance contracts excluding damage from flooding, even when the storm’s winds pushed a storm surge into coastal neighborhoods.
“I do not relish at all or like the position I’m in as the one who has to tell people there are exclusions for water,” Dale said. “It makes it look like I’m in cahoots with the insurance companies because I have to tell them the exclusions from the policies.”
Federal bail-out
Dale seems conflicted on a proposal by Taylor in which the federal flood insurance program will cover flood damages to policyholders who lacked flood insurance. Dale endorses Taylor’s plan, although he feels the concept of paying into a plan which was not initially purchased, is flawed.
“The federal government is going to have to find a way to bail out the coast,” Dale said. “But the wrong congressman is pushing the plan.”
However, if a policyholder cannot satisfactorily settle a claim, “I will encourage them to seek assistance through the courthouse, and that’s what we’re going to encourage people to do.”
Camille beneficial
Dale said in 1969 Hurricane Camille provided motivation for Mississippi to prepare for future hurricanes.
“Prior to Camille we had no building codes and coastal cities really took a beating,” Dale said. “After that our codes were strengthened and a lot of buildings hit by recent high winds survived due to that.”
And when Camille hit, Dale faced a similar situation to what he now faces with Hurricane Katrina.
“When Camille hit there was major flooding damage, at that time, if the policyholder could prove the wind came before the water, he was covered–if the water came first he had no coverage.
“The way that situation was handled in 1969 gave the insurance industry a black eye for years,” he said. “I can vividly remember Senate hearings in which Senator Muskie attacked the insurance industry. That was the one and only time newspaperman Drew Pearson wrote two columns back-to-back, criticizing the lack of flood coverage.”
A record breaker
Dale was elected in 1975 as Mississippi Insurance Commissioner, is now in his eighth, four-year term and is the longest-serving insurance commissioner in the nation.
Prior to entering state government in 1972, Dale was a teacher, coach and school administrator in the Moss Point public school system.
Always serious
Dale takes his job seriously; he executes all laws relating to insurance companies, corporations, associations, and fraternal orders, their agents and adjusters. The Insurance Commission licenses and regulates all insurance companies, agents, burial associations, fraternal societies, bail bondsmen and entities engaged in insurance.
As if that isn’t enough, Dale is also Mississippi Fire Marshall, acting through the State Chief Deputy Fire Marshal Division to administer the Mississippi Fire Prevention Code. Part of his responsibilities are to establish guidelines, use and accountability for municipal and county fire protection funds. He administers the Liquefied Compressed Gas Equipment Law and enforces the National Fire Protection Code.
Voters were confused
In 1972, when Dale ran for insurance commissioner he spent $18,000, naively believing he could rely on his record as an educator, on his friends and word-of-mouth.
Dale told Insurance Journal he attributes winning his first election to the fact that Public Service Commissioner John Dale, advertised widely so he could be reelected.
“The public became confused and associated me with the ‘other’ Dale,” the commissioner laughed.
Insurance Commissioner Dale won the election with a landslide, receiving 16,000 votes in the first primary, the highest number of votes ever for a first-time candidate in Mississippi. He also broke records as the youngest insurance commissioner in Mississippi history.
Dale said that after that humble, but surprising introduction to politics, he attributes the length of his career as insurance commissioner to always attempting to “avoid politics.”
The commissioner said his success is due to surrounding himself with competent staff and letting them competently do their jobs without intervention.
Several people on his staff have been with the insurance commission most of their lives. He said his longevity has been possible due to dedicated staff, like Sue Neal, who has been on the commission for 41 years, and Nancy Cross, who just completed 44 years.
Dale’s management style goes back to his high-school days as a coach when he learned to motivate football and basketball players and then let them run with the ball.
“I try to maintain a good work environment,” Dale explained. “I champion salary increases for my employees and maintain a good relationship with the legislature. This results in happy workers.”
During a recent meeting in Atlanta, before his current bout with Hurricane Katrina, Dale told Insurance Journal that when hurricanes hit Mississippi and insurance companies submit ever-increasing rates, it is difficult not to politicize such efforts. He said when this happens he and the carriers work for a common goal, to establish adequate rates that satisfy both sides. He maintains it is essential to maintain middle ground to avoid “drying up the insurance market.”
Dale questioned how many other states accomplish anything, citing weak insurance regulation and constant turnover. Recently, he pointed out, within only a year-and-a-half, there has been a turnover of more than 36 insurance commissioners.
“An insurance commissioner who has to depend on companies to support his election with money, is mistrusted by consumers, who question the motives behind the monies received,” Dale explained. He says elected commissioners stay longer, are consumer oriented and must maintain their objectivity.
Now, after over than 30-years in office, Dale may have to rely on his friends, insurance industry support and word-of-mouth to survive the aftermath of Hurricane Katrina and irate Mississippi policyholders who are blaming their misfortunes and lack of flood insurance on him.
Dale among ‘best’ commissioners
Dale, it seems, will receive a lot of support and votes from area insurance agents. For instance, Jackson, Miss., insurance agent Joe Bowen recently urged local attorneys and politicians to “Leave our Insurance Commissioner George Dale alone!
“I have been a general insurance agent for over 40 years and have read many recent letters about our current insurance commissioner lambasting him mainly for not getting involved in their claims with insurance companies concerning Hurricane Katrina,” Bowen said in a letter appearing in the Clarion-Ledger.
“Dale in my opinion is a fine Christian man of integrity and has been one of our best commissioners,” Bowen wrote. “He has never taken sides with a company, an agent or an insured in a claim dispute.”
Bowen continued, “About the recent claims from Hurricane Katrina: An insurance commissioner cannot make an insurance company just arbitrarily pay an insurance claim because an insured wants him to. An insurance policy is written as a contract between an insured and an insurance company. It spells out what will be paid and what will not and this is specifically spelled out in the declarations of the policy.
“The recent threats of Mississippi Attorney General Jim Hood and Gulf Coast attorney Dickey Scruggs to take four or five insurance companies to court in class-action lawsuits in an attempt to make them pay when policies did not include flood or windstorm coverage will not solve anything either.
“State Farm, Farmers, Allstate, EMC and St. Paul insurance companies also have to represent them many lawyers who will no doubt go to court to defend against paying claims that do not include these coverages.
“My brother and I owned a beach home in Ocean Springs for 12 years and we always had flood insurance, windstorm, as well as a homeowners policy,” Bowen explained. “I have never met anyone who owned a beach home or who lived south of I-10 who didn’t know whether they had flood and windstorm insurance and they also knew what was covered and what was not.
“If anyone has an insurance claim wherever and the company for whatever reason has a dispute and after a time you cannot come to an agreement, then an insured has an option to go to arbitration or mediation which has to be agreed upon by both parties,”
Bowen concluded. “If this fails, then an insured has the option to take the insurance company to court and let a jury decide the claim.”