Director Kitzman encourages S.C. competition; expected policy cutbacks never occurred

What has happened with auto insurance rates in South Carolina should be the ‘gold standard’ for what can be accomplished with other types of insurance,” Elanor Kitzman, South Carolina Director of Insurance told the Independent Insurance Agents and Brokers of South Carolina during its 2006 Spring Conference in Columbia, S.C.

“If competition is encouraged to come into the state, we should be able to attain that level of success with other types of insurance,” Kitzman explained. “The competition is the same, the concept works, if only we give it the opportunity to work.”

Kitzman said she thought the prices of coastal homeowners policies would rise after last year’s hurricane season and that she expected some companies to cut back their coastal business, but was pleasantly surprised when it wasn’t as bad as she expected. She said, however, that companies could still reassess their positions predicting, “We haven’t seen the last of rate increases in coastal areas.”

The director said she hopes to encourage new carriers to come into South Carolina.

“No one can expect to see this happen within a short period of time, but it will be likely within two or three years, because carriers view South Carolina as a favorable place to do business,” Kitzman explained.

She said she has been talking to one takeout company from Florida and is optimistic it will decide to write business in South Carolina. Kitzman is trying to convince them to come to the state to write surplus lines in an admitted market.

Kitzman suggested they develop modeling alternatives under which it would be possible to write more lines and increase their overall ability to write more coverage. She said there are no regulatory barriers in South Carolina and pointed out that often, internal company underwriting constraints are harder to deal with than external ones.

“We don’t want to wait for another year like last year,” she said.

According to Kitzman, South Carolina’s wind pool is very stable, well-managed and considered one of the best.

Workers’ comp fatigue

Kitzman said when workers’ compensation rate hikes of 32.9 percent were requested she got workers’ compensation fatigue.

The condition resulted after she turned down the rate request and has battled workers’ compensation issues ever since.

Kitzman expects her decision to deny the request to come to court April 24, and indicated the same thing happened with assigned risk/voluntary rate requests and she expects that issue to be heard soon after the workers’ comp appeal.

“I am trying to level the playing field,” Kitzman explained. “It doesn’t make sense that voluntary rates have gone up and at the same time assigned risks have gone down.”

After being appointed South Carolina’s Director of Insurance by Gov. Mark Sanford a year ago, it took Kitzman several months to determine the roles of employees in the department. She said that when she was appointed she had no agenda or set plan.

Her first conclusion was that she needed more than two deputies so she would have more feedback and to have an employee devoted exclusively to financial services.

“Financial services and solvency are very important,” she said.

Last August, Kitzman was ready to announce a major reorganization. She hired a new deputy and had some vision about where she was headed. But, she said, she had a lot of black boxes to fill with employees.

Kitzman said that now all the boxes have been filled with knowledgeable employees.