Louisiana Commissioner Candidate, Temple: State Is in Insurance ‘Crisis’
When Louisiana voters go the polls this fall, in the race for insurance commissioner they’ll have a choice between Louisiana businessman and longtime insurance industry executive, Tim Temple, and current commissioner, Jim Donelon, who has held the post since 2006.
In a conversation with Insurance Journal, Temple said Louisiana is experiencing an insurance crisis that is crippling the state. Explaining why he wants to take on the role of Louisiana’s chief insurance regulator, Temple described what he sees are critical concerns and how he would go about tackling them. Below is an excerpt from that conversation, edited for length and clarity.
Insurance Journal: What, in your opinion, are the primary functions of the Louisiana Department of Insurance?
Tim Temple: Other than obviously the statutory definition, my belief is it is to ensure a healthy marketplace, which is good for both consumers and industry, and to create a department that has a fair and consistent application of rules and regulations.
IJ: Why do you want to be insurance commissioner?
Temple: I’m running because we have an insurance commissioner now that has failed to recognize that Louisiana is facing an insurance crisis. We need an insurance commissioner that understands the marketplace, the distribution channels, how insurance works, how it affects individuals, businesses and our state’s economy. I’ve never served in the military — this is my opportunity to serve our state. This where my expertise lies, and this is the way that I see of being able to give back and to contribute to my state as a public service.
IJ: What in your background qualifies you to run the insurance department and regulate insurance business Louisiana?
Temple: I grew up in this industry. My father was in it before I was. …. He was an agent and then went and formed an insurance company called Amerisafe, which writes workers’ compensation all around the state. He was also the first chairman of LWCC, Louisiana Workers’ Compensation Corporation. He was the chairman for 23 years. Through my father I saw an individual who was active in the insurance industry, who was very focused on helping bring insurance products and solutions to people whether it was an individual or a business.
Then I entered the business, started off as an insurance agent. Did that for almost half a dozen years. As an insurance agent I was selling insurance. I also ran a workers’ compensation program, as well as an ERISA program in Texas. I left that and became a reinsurance intermediary, or reinsurance broker. I did that for almost 10 years and enjoyed that immensely.
After that I got engaged as part the executive management team of a large commercial trucking managing general agency. We were writing commercial trucking risks all over the country.
I left there and became part of the management team of a claims TPA in New Orleans. Through that process we got engaged with the BP oil spill claims process that was headed up by Ken Feinberg. I left that company as the CEO and went and worked at one of the largest catastrophe claims adjusting firms in the country. Through that put together and ran a disaster recovery program in New York and New Jersey after Superstorm Sandy.
That’s almost 24 years of insurance experience. That allows me to truly understand how insurance works. It’s a complex business as you certainly well know. And quite frankly we’ve never had an insurance commissioner in Louisiana that had … any prior insurance experience before becoming commissioner.
IJ: How would you describe the current state of Louisiana’s insurance market?
Temple: I’ve been saying since early January that we’re in a crisis. But as I’ve been traveling around the state and I’ve had conversations, and more importantly as I’ve listened to insurance professionals to individuals to business owners, I think I’m going to change that — I think we are approaching insurance catastrophe in our state.
Just look at the numbers. Louisiana is the most unaffordable state in America for insurance. We have the second highest private passenger auto rates in the country. … I believe that we’re destined to be number one next year with some changes to the law in Michigan.
And our commercial trucking industry is truly in a catastrophe. Risks associated with our forestry industry, which is our largest agricultural product in our state — they are seeing huge rate increases year over year with little or no loss history associated with that. Most of them, especially in the logging industry, they get at renewal one, maybe two quotes if they’re lucky. But renewal is basically a take it or leave it quote. Deductibles associated on those policies are climbing. This is combining to choke out a vital industry in our state. …
Those companies, they’re shutting down, they’re leaving the state, crossing the border going into neighboring states because insurance is sometimes more than half less expensive just by moving out of state.
I’m going to let companies get back to managing their risk. … I’m going to work with industry, work with the department. We’re going to identify laws and regulations that are stifling the market. And if there are rules and regulations that are stifling the market then as commissioner, I’ll make those changes if I agree with them. If it’s legislation, then I’m going to work with the legislature. It may not be enacting new laws. I’m thinking it’s perhaps repealing existing laws. …
We need more robust homeowners policies in our state. We’ve got some thinly capitalized homeowner carriers that have been allowed to come into the state as part of a takeout for our Louisiana Citizens take out program. We need to look at that. …
All of those markets that I just mentioned, whether it’s commercial auto, private passenger, the homeowners. Flood is another one. We need to identify where the pain points are for consumers and work to bring in more companies, more competition. Not just talk about it, but actually enact changes that will bring more companies back. …
The most important issue on everyone’s mind in this state is the affordability of insurance. It’s being talked about at every level of races we’re having in our state — from the governor’s race down to the local house and senate races. It’s affordability. We’ve got to focus on that, we’ve got to make some changes.
The status quo [has not served] Louisiana well for the last 14 years, and I aim to be the commissioner to introduce a fresh perspective, a perspective that understands the insurance industry with the goal of bringing competition in and making insurance affordable again for Louisiana.
IJ: If elected, what would be some of the first initiatives you would pursue?
Temple: On day one after the election, I’m going to start reaching out to staff, the industry, industry experts, companies. We’re going to start identifying legislation and laws that are inhibiting competition in Louisiana. That are making companies less competitive.
Then I’m going to start working on those. … If it’s regulation, if it’s something I can do within the department as commissioner then we’re going to tackle those immediately. If it’s legislation, I’ll work with the legislators to help identify whether it’s an existing law that needs to be repealed or, second choice, a new law that needs to be written. But with the goal of … giving insurance companies the ability to manage their risks and entice them to come back and write in Louisiana.
I’ll identify companies that had written business in Louisiana and left. I’ll go meet with the presidents of those companies. I’ll ask them — why did you leave? Give me specifics — why you left our state. What would it take to get you to come back and write business in the state of Louisiana? I’ll get those commitments. I’ll ask them — if we make these changes, will you commit to come back to Louisiana? That hasn’t been done in a long time.
IJ: What message would you like to convey to insurance agents and brokers in Louisiana?
Temple: I am going to take politics out of the office. I won’t make rates or policy changes headline news. I won’t issue press releases on interactions or department business that are only intended to further my political career.