Where Georgia’s Insurance Commissioner Candidates Stand

Georgia voters going to the polls on Nov. 2 will have a real choice when it comes to electing the state’s next insurance commissioner. The Democratic, Republican and Libertarian candidates hold different positions on issues including credit scoring and caps on malpractice awards and have their own views on the roles of the state government, independent insurance agents and money in politics, according to a survey by Insurance Journal.

Three candidates are in the race to succeed John Oxendine, who has served as commissioner since 2004. Oxendine decided to run for governor but lost in the Republican primary. The three running to replace Oxendine are:

• Mary Squires, a Democrat, National Guard veteran, former member of both the House and the Senate, and currently executive director of the Georgia Society of Professional Benefit Administrators, Inc., a self-insured health care trade association.
• State Sen. Ralph Hudgens, a small business owner and former House Republican member (elected in 1996), who has been in the state Senate since in 2002. He has served as chairman of the Insurance and Labor Committee and vice chairman of the Banking and Financial Institution.
• Shane Bruce, a Libertarian political blogger on his site, Bludgeon & Skewer. When he’s not blogging, Bruce installs industrial steel structures for material handling operations for a company in Atlanta.

One issues facing insurance commissioners across the country is whether insurers should be allowed to use credit scores in underwriting autos and homes.

Democrat Squires opposes the use of credit scores by insurers as unfair, while Republican Hudgens says the practice should be allowed but needs to be closely monitored.

“I don’t support insurance companies’ use of credit scores in underwriting. Age, marital status, military service, and home ownership negatively affect credit scores. Why should we punish someone who is risking their life to protect us? Why should we punish someone who is elderly and spent most of their adult life in a time before credit became such a heavy influence on our economic standing?” stated Squires.

Hudgens is more open to the use of credit scoring. “As with any relatively new risk assessment tool, credit scoring must be continually monitored to ensure that it is properly measuring risk, and that no one is being unfairly discriminated against,” he said.

Libertarian Bruce said he thinks the use of credit scores by auto and home insurers, like pre-existing medical conditions in health insurance, is one of the many things Georgia consumers don’t like about insurance.

Award Caps

In March, the Georgia Supreme Court struck down a cap on medical malpractice awards that had been passed in 2005. Squires and Bruce do not support reimposing caps on awards, while Hudgens, the Republican, does.

Hudgens said he favors state caps in part because he is concerned that the state will face a serious shortage of trained medical professionals in the coming years and that one “way Georgia can attract physicians is by working to insure fairness in our judicial systems for health care providers when they find themselves in court.”

Squires does not support caps because she does not believe they lower insurance rates. “The caps have had the opposite effect in Georgia,” she said.

Bruce opposes them because he believes caps are unfair to individual citizens. “Our health care delivery systems, the insurance providers and our friendly trial lawyers are locked in an unending struggle over money. All sides have gamed the system and now seek advantage by using the power of government to make sure that the citizens at large are on the hook. If a doctor makes a mistake and damage is done, redress should be available to the injured party,” he wrote.

Top Priorities

Insurance Journal asked the candidates what their three top priorities would be if they are elected on Nov. 2.

Sen. Hudgens said his priorities will be: consumer education, fighting insurance fraud, and opposing Obamacare and expansion of the federal government.

According to Hudgens, the commissioner has the responsibility to create a level playing field for buyers and sellers of insurance products. “A good regulator blows the whistle and keeps all the players following the rules of the game. If a consumer knows the rules and is fully informed, I trust them to make the decision that is best for their family,” he said.

Hudgens said he would be involved in health care. “I am deeply concerned about the new federal health care take over. It is obvious that the Democrats just do not fundamentally believe in the power of the marketplace and consumer choice,” he said.

For his priorities, Libertarian Bruce said he will focus on reducing the cost of auto insurance in the state, drawing attention to the state’s premium tax and health insurance coverage mandates, and modernizing the commissioner’s operations.

“As I see it, the Commissioner of Insurance is charged with ensuring that Georgia citizens get the best bang for their insurance dollars that they can. That means that Georgian’s have to have viable choices from a wide range of providers at competitive prices,” Bruce wrote.

He said the state insurance regulator must serve people of the state, “not the interests of the companies he is responsible for regulating.”

Bruce said he would utilize the bully pulpit of the office to educate Georgians on the “horrendous effects our ultra high insurance premium tax has had on keeping new providers out of Georgia as well as the negative effects of our 45 health insurance mandates.”

“The primary job of Georgia’s Insurance Commissioner is to protect consumers, and provide a fair and efficient competitive regulatory environment,” according to Democrat Squires.

Squires said her first priority if elected would be to implement a department-wide ban on lobbyist gifts, travel, meals, and other influences.

Next she said she would work to make the state a national insurance and risk finance hub. “Georgia has two of the best risk management schools in the country. Let’s increase competition in the insurance market and bring new jobs to Georgia. Georgia can be a national leader in alternative risk transfer innovation and regulated change,” Squires said.

Third, Squires wants to establish an around-the-clock customer service and crisis command center. “Emergencies and questions don’t just happen during business hours,” she said.

Role of State

The candidates were also asked what they think the role of state government should be in health insurance.

Bruce used the question to criticize all government intrusion into the industry. “By intervening in our state’s health insurance markets, our state and federal governments have limited competition, increased prices and reduced choice. A truly free market approach would have the opposite effect,” he wrote.

For Squires, the state has a role to play in regulating health insurance products. “The Insurance Commissioner must make sure that consumers are protected, that rates are properly regulated, and that a fair and efficient competitive environment is established and maintained,” she stated.

Hudgens, who sponsored legislation block the federal government from forcing Georgia citizens into buy health insurance, is less concerned about the role of state government than he is about the federal government. He supports letting insurers market health products across state lines. “The answer to our health insurance challenges can be found in the free enterprise not some government run program,” Hudgens stated.

Political Money

Georgia law currently forbids public officials from taking money from the companies they regulate. All three candidates say they support the law. Hudgens and Squires said they do not think it is necessary to also ban all contributions from insurance agents and industry employees.

But Bruce, whose Libertarian Party traditionally opposes government restraints, had a different take on the current law and why candidates should not take money from industry employees:

“Georgia law forbids it but my opponents routinely ignore the requirements of the law by emphasizing that they are taking campaign contributions from citizens. The fact that those citizens own and operate insurance firms the Commissioner regulates is treated a secondary matter. From my perspective, this is a question of principle. If you intend to be a fair and impartial regulator, you cannot be influenced by those you will regulate,” he wrote.

The three see eye-to-eye on the need for the insurance regulator to be involved in attracting new insurers and insurance jobs.

Squires and Hudgens also agree on the importance of the role played by independent insurance agents in the insurance system, while the third candidate, Libertarian Bruce, fears the best days for independent agents may be behind them.

Bruce said he thinks independent agents may have peaked several years ago.

“Like the travel agents of the ’90s, today’s independent rep is facing huge pressures from the internet not to mention the looming disaster of Obamacare. What will their jobs become when the basic product they sell has no profit margin?” Bruce wrote when asked for his view on the role independent agents play in insurance.

Squires described independent agents as essential. “Independent insurance agents are on the front line in communities, helping consumers select appropriate products to meet their personal and business coverage needs. It is often the independent agent that is first aware of changing consumer needs, rating issues, and functional or flawed regulations. Independent agents provide greater options providing a “better fit” for consumers,” she wrote.

One of the ways Georgia might increase the number of insurers and jobs in the state is to lower its premium tax, according to both Squires and Bruce.

“We can increase competition and bring new jobs to Georgia by making the Department of Insurance fast and efficient; focus on lowering the premium tax; and eliminate the backlog of fraud, abuse, and unpaid legitimate claims that makes Georgia unattractive to insurers and consumers,” Squires said.

Bruce would go beyond the premium tax. “In order to attract more providers we have to get our insurance premium tax out of the equation. We have also got to drop our 45 health insurance mandates and insist that providers make them optional,” he believes.

Hudgens said he is committed to upholding stability in the insurance marketplace as a means to creating jobs. “If we are to enjoy all of the opportunities that a strong insurance market affords then both insurers and consumers need an even-handed regulator. I am committed to stability in the marketplace,” the Republican state senator said.