Georgia voters will select a new Insurance Commissioner in 2018 as the cost of coverage in the state has been growing. HYOSUB SHIN / HSHIN@AJC.COM
Photo: The Atlanta Journal-Constitution
Photo: The Atlanta Journal-Constitution

Insurance commissioner race spotlights Georgia’s auto, health care woes

With Georgians facing skyrocketing auto and health care premiums, voters go to the polls later this month to decide who will be the state’s next top insurance regulator.

Three Republicans and two Democrats are facing off in primaries to replace Insurance Commissioner Ralph Hudgens, a Republican who once vowed to be an Obamacare obstructionist and told reporters that a state law he supported kept him from doing anything much about escalating auto insurance rates.

While Hudgens has endorsed a former top aide — Republican Jay Florence — to be his successor, most of the others are running away from the agency’s record, which includes financial problems and Georgia ranking either first or second for auto insurance rate increases the past few years.

“I have not been endorsed by the incumbent, and I am grateful for that,” said Tracy Jordan, a pharmacist, Realtor and former Hoschton city councilwoman running as a Republican. “I am proud to tell the people of this state I am not funded by large insurance companies.”

Tracy Jordan
Photo: The Atlanta Journal-Constitution

Jim Beck, a Republican and Carrollton native who has worked for Hudgens, as an insurance lobbyist and for the Georgia Underwriters Association, said receiving an endorsement from the incumbent “is like the captain of the Titanic recommending the first mate and saying, ‘He knows what it takes to run a good ship.’ “

Jim Beck
Photo: The Atlanta Journal-Constitution

Florence, who served as an enforcement attorney, agency lobbyist and most recently as deputy commissioner to Hudgens, responded, “I am proud to have Commissioner Hudgens’ endorsement and proud to have the support of a lot of people in the state.

“People around the state want someone with experience who has been a regulator and understands the job.”

Jay Florence
Photo: The Atlanta Journal-Constitution

While health care advocate Cindy Zeldin and insurance agent Janice Laws are running in the Democratic primary, the big money, so far, is on the Republican side.

As of March 31, the end of the last filing period, Beck had raised $1.1 million, most of it from his own bank account. Florence had raised $731,000, much of it from insurance firms and other industries the office regulates.

Jordan had raised roughly $40,000.

That Florence is getting a lot of industry checks isn’t surprising. Hudgens and his predecessor, John Oxendine, long raised much of their contributions from insurance executives, attorneys, examiners, small loan company owners and others in the businesses regulated by the commissioner’s office. Hudgens donated $6,600 to Florence’s campaign the day he announced he wouldn’t run for re-election.

The incumbent, who was elected in 2010 after serving as chairman of the Senate Insurance Committee, faced questions last year after The Atlanta Journal-Constitution reported that he had to lay off and furlough staffers because his agency overspent its budget. A state audit said the agency was doling out raises with money it didn’t have to spend. Hudgens told the AJC that the shortfall was due to faulty information from his chief financial officer, who resigned. 

The agency has been in the spotlight even more for rising auto insurance premiums. The AJC reported in 2015 and 2017 that premiums were rising faster than almost anywhere else in the U.S. Increased traffic congestion, more distracted driving, an increase in accidents and the rising cost of fixing cars were among the problems cited, although at least some of the same problems are facing other states as well.

Hudgens also blamed a decade-old state law — which he supported when he served in the General Assembly — that he said ties his hands. The law allows companies to begin charging higher rates without state approval.

After rates skyrocketed in the late 1980s, the General Assembly changed state law so that the state’s insurance commissioner had to approve increases proposed by companies. The industry hated the law, and its lobbyists at the Capitol fought to change it, which lawmakers did.

Under the current law, companies can implement new rates and the insurance commissioner can merely review them to make sure they aren’t either “excessive or inadequate” to keep the company in business, and to make sure they aren’t discriminatory.

The definition of “excessive” in the 2008 law all but guarantees that if there are multiple companies selling insurance in the Georgia market it will be difficult, legally, to fight a big rate hike, Hudgens said.

Florence backed a bill during the 2018 General Assembly that would have given the commissioner more options, but it went nowhere in a Legislature heavily lobbied by the insurance industry.

All the candidates interviewed by the AJC said they support giving the commissioner’s office more power to review and stop or cut proposed rate hikes before consumers have to pay them.

“I see a strong role for the insurance commissioner’s office in reviewing the rates submitted by companies and creating a higher level of transparency,” said Zeldin, who added that she might consider publicized hearings where companies make their cases for an increase.

Cindy Zeldin
Photo: The Atlanta Journal-Constitution

Florence said: “We need to change the law. People of this state expect the insurance commissioner can review rates and find out if they are excessive.”

But Beck said it goes beyond changing the law.

“We have to change the way the office is handling the cases,” Beck said. “They have done a good job of convincing people their hands are tied. I don’t believe that. We need a different person implementing the law.”

Beck said the state should turn down big rate increases and fight companies in court if necessary.

Oxendine, who was insurance commissioner when the law was passed in 2008, warned it would lead to big rate increases. Jordan said he was right. “What was touted as a boon and deregulation caused more problems,” she said.

Laws has proposed capping the size of premium hikes, something that would likely take legislation. “I am tired of consumers getting taken advantage of,” she said.

Janice Laws
Photo: The Atlanta Journal-Constitution

The candidates also all promise, if elected, to take a more active role in pushing for improved and lower-costing health insurance.

The commissioner’s office has a limited role in regulating the industry, but most of the candidates said they’d push the state to seek waivers to use federal money to drive down premiums and increase access to coverage. Zeldin also promised, if elected, to push a long-held Democratic initiative: for Georgia to expand access to Medicaid, the state-federal public health program for the poor, disabled and elderly living in nursing homes.

Georgia Democrats have backed Medicaid expansion under Obamacare, but Gov. Nathan Deal has consistently said it would be too expensive for the state, and the idea has never gone anywhere in a Capitol dominated by Republicans opposed to the federal health care law.

The campaign to replace Hudgens has been going on since he announced he wouldn’t run last summer, and the battle between two of the leading Republicans has been particularly hard-hitting.

While Florence said little about Beck when interviewed by the AJC, his supporters point to recent media reports that his opponent held a full-time state job while running the Georgia Underwriters Association, a state-created company for Georgians having trouble obtaining coverage.

Beck, who has served as head of the Georgia Christian Coalition, said he worked flexible hours, more as a consultant than a standard employee, and that his bosses were happy with his performance

For his part, Beck said Florence played a role in some of the insurance agency’s problems in recent years and accused him of being the insurance industry’s pawn in the race.

“It’s clear the industry insiders, the Capitol gang, has anointed Jay with their dollars,” he said.

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