Georgia Insurance Commissioner Race: Views on Credit Scoring, Tort Reform

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

Three candidates are in the race to succeed John Oxendine, who has served as commissioner since 2004. Oxendine decided to leave the post 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 an association executive who is 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 is an installer of industrial steel structures for material handling operations for a company in Atlanta.

Insurance Journal recently surveyed the three candidates on issues ranging from the use of credit scoring by insurers and the charging of emergency response fees by municipalities to the state legislating caps on medical malpractice awards and the role of state government in health insurance.

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

According to Insurance Journal‘s survey, Democratic nominee 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.

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 medical malpractice awards, while state Sen. Hudgens, the Republican, does.

Hudgens said he favors state caps on medical malpractice awards 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.

Georgia has a law prohibiting municipalities from charging accident response fees, which are being tested in other states. Hudgens and Squires, while sympathetic to local budget challenges, oppose municipalities charging emergency response fees to motorists in car accidents.

“Local governments need to think hard about making the budgetary decisions necessary to cover emergency response services. If they are receiving federal or state funds to provide emergency response services at the scene of an automobile accident then they must provide those services. This billing practice is being used by some local governments as a ‘found’ revenue stream, hoping that the consumers’ auto coverage will pay. Even victims find themselves billed for an accident they did not cause,” commented Squires.

Hudgens said he believes charging non-residents for emergency services is “shortsighted” and sends the wrong message to visitors. “I know those who promote these schemes like to say it is the insurance company not the visitor that would pay the fee, but we all know that it is the policyholder who ultimately pays all the bills,” said Hudgens.

However, Bruce thinks such fees make sense. “TANSTAAFL. It’s old Libertarian saying that translates, “There Ain’t No Such Thing As A Free Lunch” and there ain’t. If you wreck your car and it’s towed, is that free? Nope. If somebody else wrecks your car and you wind up in the hospital is that free? Nope. Do police cars, fire trucks, ambulances and their assorted crews cost the public money at crash scenes? Yes. Should the public be forced to underwrite the expenses of crash victims through “free” services? A really big Nope,” wrote the Libertarian.

This is Part 1 of a 3 part series on Georgia’s Insurance Commissioner candidates. Don’t miss tomorrow’s Part 2 in which they list their top priorities and offer their views on political contributions and the state’s role in health insurance.