A controversial insurance agents minimum commission bill pushed by a powerful House leader failed to win support of the Senate on the 40th and final day of the 2016 General Assembly session.
House Bill 838 would have guaranteed a minimum 5 percent commission for agents who sell group health policies to small businesses. It also would set a 4 percent minimum commission for individual health benefit plans.
But the bill stalled after the The Atlanta Journal-Constitution raised questions about the fact that it was being pushed by House Rules Chairman John Meadows, R-Calhoun, an insurance agent. Meadows’ committee decides which bills get votes in the House, so he is one of the most powerful members of the General Assembly.
After the AJC story, the bill stalled in a Senate committee. But Meadows made it clear that Senate bills would have a hard time getting through his committee if his bill stalled, and it eventually passed the panel.
In the end, the Senate sat on the bill.
In a legal opinion written for a Senate opponent of the bill, legislative counsel Wayne Allen said there could be potential issues that would make it subject to a legal challenge. Allen cited case law dating to 1951, when the Georgia Supreme Court struck down a law allowing the Georgia Milk Control Board to set the price of milk because it violated the state constitution’s due process clause.
The courts, Allen said, have a long history of trying to prevent any intrusion by lawmakers into private business affairs without it clearly being in the public interest. And it was not clear, Allen said, that the courts would see Meadows’ bill as being in the public interest.
State Rep. Shaw Blackmon, R-Bonaire, who carried the measure for Meadows, said, “It is unfortunate this legislation is necessary.
“However, with respect to health care, we are in uncharted territory and free market principles no longer apply the way they once did,” he said. “This simple solution would protect independent insurance agents from being denied compensation when providing this service to individuals and small businesses.”
Republican lawmakers have long criticized government attempts to involve itself in the marketplace, particularly on wage issues. And the fact that the idea came from a powerful House leader who sells health insurance for a living raised conflict-of-interest questions.
Georgia’s conflict-of-interest laws are weak —- some would say nonexistent. Members can recuse themselves from voting on issues when they have a conflict. Some do. Many don’t. And members don’t publicly investigate such conflicts. They generally only play out in the media.
The rules basically dictate that unless a bill solely benefits a member’s business, recusal isn’t necessary. House members recused themselves 18 times during the 2015 session, according to the most recent data available. In the Senate, members asked to be excused from a vote on seven occasions.
About a dozen lawmakers who work in the insurance industry or have lapsed agents licenses serve on the House committee that passed Meadows’ bill. Several senators working in the insurance industry who serve on the Senate Insurance Committee recused themselves from voting on the bill when it came up.
About the Author
