Michael Jackson wants to be your insurance commissioner. Yes, Sen. Michael Jackson "Mike" Chaney is running for Mississippi Commissioner of Insurance on the Republican ticket, and facing Democrat Gary Anderson, of Jackson, in the November election.
Chaney, 63, has been in the public eye since winning election to the Mississippi House in 1993. He later switched to a Senate seat in 2000. He said he ran for office 15 years ago with the desire to tone down taxes on state businesses. Chaney represents the small river city of Vicksburg, and is one of the more respected voices in the Senate. Lately he's made a name for himself through his vociferous support of the full funding of the Mississippi Adequate Education Act this year, though critics claim his support for actual full funding came only once in the last four years, the most recent during an election year.
Though one of the more fiscally conservative personalities in the Senate, Chaney fully supports raising the state's tobacco tax by $1. He opposed the recent tax swap attempts in both the House and Senate, however, arguing that cutting the grocery tax would hurt smaller municipalities, who rely upon it.
The state of Mississippi has some of the highest insurance costs in the nation, and Chaney said he wants to bring those prices down by encouraging more competition, entering into a southern states coalition to raise Mississippi's buying power, and by imposing stricter building codes in disaster-prone areas.
What's your history? You weren't always in Vicksburg, were you?
I grew up in Tupelo. I was a paperboy, and I stacked groceries. I drove a school bus during my senior year in high school, so I would have money to go to MSU.
You drove a school bus?
I'm actually listed in the civil rights files because I drove a school bus.
Pardon? What are the civil rights files, and what's that got to do with a bus?
The State Sovereignty Commission. The civil rights files in the State Sovereignty Commission. It was the fact that I was willing to drive where (the school) told me to, and at that time, schools were segregated. I was against the grain in that. You might say I was a little bit ahead of my time. This was 1961 and 1962.
Dangerous years for that kind of attitude. Why did you get into politics? You weren't on your father's knee saying you wanted to be a senator, right?
No, I got into politics because I was the party chairman in Warren County, and the representative of our district was appointed to head the tax commission by Gov. Kirk Fordice, and my job was to find someone to run to replace him. I talked to several folks and they turned the tables on me and talked me into running. At that time, I had just sold my core business, and it gave me an opportunity to run, and in addition to that, the casinos moving into Warren County had just been voted in and the taxes on several pieces of real estate I owned—I still own many pieces—went up almost 10 times what they were worth a year before, so I have a dog in the hunt in trying to control runaway taxes and solving some problems in state government. Another problem I wanted to work on was workers compensation insurance.
Were you always a Republican?
I was a young Republican. During my days in college I worked with the Barry Goldwater campaign, and you might say I've always been a Republican.
Your early life seems to go against a popular stereotype. A bus driver running a route unpopular with separatists—some would argue that many Mississippi Republicans are former Democrats who fled the party to get away from the influx of voting blacks.
I don't agree with that. I think the Republican Party is the party that says the best government is the government that governs least and allows individual freedoms. I look at government as an enhancer for the free enterprise system and not as a replacement for a free enterprise system.
What was your core business that you sold before entering politics?
My core business was petroleum, oil and gas. That was 1991, when I sold it.
Why would you want to be insurance commissioner? You've got great tenure in the Senate.
Because I can make a difference to all the citizens of the state of Mississippi. Insurance is the Jesus faith-nut that holds the economy together.
"Jesus faith-nut"? Sounds like a JFP "Word" on the way.
Nothing. Carry on. Holding the economy together.
If you can't insure it, you can't finance it. If you can't finance it, you can't build it. That applies to homes and businesses. Without insurance, it would be hard to have manufacturing jobs, and without jobs you have no people. No people, no tax base. Without a tax base, you have no infrastructure to support fire protection, police, roads, highways or a means to attract industry.
What kind of changes would you make to the office?
I would like to see insurance be available, reliable and affordable to all 2.9 million Mississippians, not just for very special interest groups. I would like to make certain that the charge of the insurance commission is to be a regulatory agency to protect the consumers, to balance the industry with the needs of the consumer.
What are some of the methods you'll use to do this? The last guy seemed to have had a hard time doing that, according to voters, who voted against him.
According to voters, he had a hard time doing it, but—I'm not casting stones at anyone—but if you serve 32 years in government in one position, you must have been doing something right. I think that, contrary to what some people may think, the previous commissioner did a pretty good job of trying to regulate the industry. He may have passed his time for serving, but we had a very stable market for serving the state for the last 32 years.
No criticisms of the current system then?
Our homeowner rates are too high. What insurance companies, by and large, want—there's a difference between insurance companies and insurance agents. Agents are people who sell policies—life insurance, health insurance and also homeowner and property and casualty insurance. They can only sell those products within a very narrow range. They can only provide coverage based upon what the companies they work for give them to sell. They are not the problem. The real problem lies with the very large companies not being reactive to the consumer. The problem for Mississippi is very simple. We are not a big percent of the total insurance market of the U.S. The commissioner has to be very wise in how they handle insurance companies, to be certain that everyone in our state can get coverage.
One of the things I propose to do is to have a Gulf States coalition that will prevent the insurance companies from cherry picking, or threatening to leave Mississippi or Alabama if we don't do what they want us to do. By having a coalition you have a lot of strength. A southern states coalition would have a bigger market to sell to insurance companies or to provide them a market to sell in than, say, California. So it makes us a very powerful group.
Can I take it the last guy didn't try to form a coalition himself?
Well, I think they explored the idea. I've been on the state's insurance commission in the Senate for the last eight years and we looked at trying to allow that to happen but you can't do interstate cooperative agreements—a Gulf States interfaith agreement—to work together.
Now, there is a meeting on the 24th of September with the National Association of Insurance Commissioners to look at that again. It's going to happen on the coast and I will be there to testify concerning the building codes that I helped put together for the Gulf Coast.
That brings up the subject of what could I do to bring new insurance companies to the state. What you do to encourage more insurance companies to do business in a high-risk area like the Gulf Coast is you require homes that are built after a catastrophe to be built to building codes so that they can withstand another disaster. The cost of doing this is very nominal compared to the cost of insurance. It's about a five percent increase in the cost of a new home. I passed a data-bank bill in 2007 that allows houses built to codes to be inspected and put in a data bank so owners can qualify for some discounts on their homeowners insurance, anywhere from 11 to 19 percent. It could actually go up to a 30 percent discount. That makes insurance affordable on the Gulf Coast for those people who want to live in those high risk areas, so they can still get insurance, though they will pay a little more for their home.
Some owners claim the extra costs in bringing their re-built homes up to new codes actually discourage re-building.
That is absolutely not true.
If I put somebody on the phone who says they can't afford to build on the Coast because of new code requirements, what would you tell her?
I tell them they need to be looking at what it would cost them without the new codes. The codes basically involve things like hurricane clips (small, stainless steel or galvanized steel clips that go on the rafters of a house). Or it could be a cable that runs from the top plate on a rafter down to the foundation, which keeps the house from blowing away.
Florida instituted new building codes after Hurricane Andrew in the 1990s, and they took satellite and aerial photographs after the hurricanes that hit the coast following the new codes, and they found that the homes built to the new codes are still standing and still there.
Another good example would be the North Carolina and South Carolina homes that survived Hurricane Dean. The new homes built to codes suffered very little damage. We must do the same thing for the Mississippi coast—and even for the homes in north Mississippi, for those houses in the new Madrid fault area for earthquakes.
Don't some pre-existing codes already require foundations be raised a few inches in preparation for the next surge?
That's not a building code requirement. That's a requirement of the FEMA agency. They require houses be built a certain elevation above sea level. The state legislature has no influence whatsoever over that at all. That's a federal issue because flood insurance is involved where you have flood elevations. A lot of people thought they did not have to have flood insurance because they were not in a flood zone. Flood insurance is usually sold based upon the occurrence of a flood every certain number of years. But now the flood maps are having to be re-drawn based on current history. That may mean an increase in elevation, forcing you to build anywhere between two to three feet higher than before.
Yeah, but state codes in addition to the new FEMA requirements have to take a toll.
It's either that or no coverage at all, wouldn't you say? I'd take the better codes over not being able to get insurance and build at all.
How do you regard the industry right now? Do insurance companies have unfair advantages over policyholders—made clear, perhaps, through Katrina?
I think the industry now has to be very cognizant and aware that they cannot use their size to beat up on the consumer, to deny and delay paying the claims that consumers may have for a policy. I have made it very clear that if big insurance companies use their own in-house adjusters and do not pay a valid claim, I will sanction them to the fullest extent of the law.
When it comes down to it, what precisely is the power a commissioner wields over insurance companies? I've heard your power is compromised.
The commissioner controls the rates that insurance companies can charge. Therefore if a company doesn't feel like it's getting a proper rate, they may refuse to write in the state of Mississippi. But the commissioner could refuse to give them a rate increase, and the insurance company could then refuse to write. The commissioner's job then becomes one of trying to find a company that the old business will no longer write. The commissioner is a very powerful position, in that they can control what homeowners may or may not pay for homeowner's insurance. The commissioner can control, within a range, what a consumer may pay for automobile insurance.
If you listen to Mississippi Attorney General Jim Hood, he says the commissioner's hands are largely tied behind his back.
On what issue?
Consider this: The industry ignored Dale's 2005 call to pay wind claims without flood verification. The argument is that the industry, right now, has the power to ignore the commish, so long as all they have to do is pull anchor and leave.
They can ignore the commissioner on settlement of claims simply because there is no statutory law that allows the commissioner to settle claims. That is not part of the duties as written by state law. I'll ask the Legislature to look at changes that would enhance the power of the insurance commissioner. That would be included in the things we would ask them to review. [The Legislature needs to] address the duties of the commissioner as it relates to claims. Hood is correct in that the commissioner's hands were tied in trying to settle claims, but what the commissioner can do is prohibit or allow the joint legal actions against a company. They have the ability to allow some of that, but they do not have the statutory requirement to try to settle claims between a company and a policyholder.
What do you make of more than one company refusing to write certain policies due to lawsuits or what they claim as an unfriendly business climate? Do you think that's an example of Commissioner-stomping?
When the industry flicked Dale's 2005 order away like a fly, I call that commissioner stomping. What do you make of it?
A company can try that, but you can prevent that from happening with a Gulf States coalition. With some tweaking of the statutory laws you can have a little more power to wield in the negotiation process with insurance companies, but we must remember that it's a free-market economy all across the U.S. You can't force an insurance company to write, and anybody who claims they can make them write they're not telling the truth. You can't force them to do that. You can only make them follow the law and to perform under the contractual agreement that they have with the policyholder.
Another aspect of my platform that will address that issue is that policies should be written in simple, unambiguous language that clearly states what you are covering and not covering. If a company will not write policies in that method then they cannot do business in the state of Mississippi.
Will that require legislative changes?
It will not. It's already being done. You can do that with law that's on the books already.
How come we don't have it already, then?
Our present commissioner has already started instituting some of those changes. They just started this year. They have put into place a modified bill of rights for insurance consumers. I think that's a good step in the right direction, just as I do in the requirement of policies to be written in simple language
Let's be frank. Do you really think you can adopt an adversarial role against the insurance industry when required?
Yeah. Oh yeah. The job of the commissioner is to be a regulatory worker to protect the consumer. You have to take an adversarial position sometimes against companies. I would be the first to tell you, though, that not all companies are guilty of ignoring policyholders. I really don't think, from what I've seen, there's a big violation of that, although in the area of the Gulf Coast, after Katrina, a lot of confusion was there over the fact that people had not reviewed their policies. Policies were not written in simple, unambiguous language that was easy to understand, and people thought they had been told that they didn't need flood insurance.
Then you have the other problem of insurance companies saying that anything that's wind-driven water, if it hits your home then you're automatically excluded from wind damage. You had conflicting clauses within a policy. That needs to be cleared up, either through an all-perils policy or by going back to simple language: 'you are not covered for wind-driven water. If your house is hit by wind-driven water, such as rising water from a hurricane, and most of your house has been destroyed by wind you will be paid zero percent or 10 percent.' Companies must put in print, in very simple language, what you will receive if something like that happens.
Is it possible to do that? You're talking about a policy that has to rule out everything it doesn't cover. The list has to get pretty long.
It can be done. There are methods to do that, and there are methods to adjust claims. We need to be looking at what I call a grid zone system for adjusters where you don't have four adjusters on one house. You can utilize less than four. Right now you may have an adjuster for a roof, one for fire, one for wind, one for flood. Also, if the data bank is instituted, it would make it even simpler for us to go in and take care of policyholders and their claims. The other thing I would require, as insurance commissioner, is people who have homeowner's insurance at a loss should be paid immediatly in some form of compensation to cover immediate expenses up to a certain percent. You know, maybe three, four or five percent of their policy. If they have a $100,000 policy, they ought to get $2,500 or $5,000 to start paying expenses immediately without having to get into the hassle over what precisely did the damage.
That's sounds like a legislative thing.
No, I think some of that can be accomplished through enforcing policy language. That's something the commissioner could require companies to do. The idea is to make certain they have at least some money to exist on until their claim is settled. Some of the companies are looking at that right now. That's a more a contractual arrangement rather than a statutory necessity.
It just seems like somebody would have come up with that already if it was so easy to accomplish.
Some of that has been done and tried in other states, and it works great. It just seems that if you've lost your checks, your bank card, your credit cards, and the financial institutions are on hold, then you need some alternative to living with your kids. Nothing wrong with living with your kids, of course.
Back to the adversarial role. Could you name one instance in the last two years that you might have taken a harsher stance than Dale?
Where Commissioner Dale has been good is he has asked State Farm to go back and try to mediate claims. That's not a requirement of his job, but he's been able to do that. He took an adversarial role there and made them go back to the negotiating table.
I meant to ask you what you might have done different. Wouldn't want to link you too closely with Dale. He did get voted out, after all.
What I would've done different is I would've been very much ahead of the curve in doing the same things that Gov. Barbour had done in being certain that we had people on the ground immediately. I would've had adjusters on the north, east and west, able to go in and be ready to move. I would've made certain that they knew where they were headed and could take care of the problems at hand. I would've had FEMA and MEMA coordinate its efforts to help folks, though as insurance commissioner you got to remember that we are not into disaster management. We're not the Red Cross, but what we could've done was require those companies to be better prepared in case the hurricane hit. There are a lot of things that cannot be done by national or state law. You can't write a policy once a tropical storm or hurricane has crossed a certain parallel. You're prohibited from going out and trying to buy coverage because you think a hurricane is going to hit you now. There's a parallel, and you're limited as to where you can write once the hurricane crosses that parallel. I forget what number it is.
The other things you would do is I would encourage some method of having emergency communication. You know, I was chairman of (the) education (committee) in the Senate, and during my 15-year legislative history I'm a very big proponent of taking care of public broadcasting. That includes rebuilding those towers. They were one of the only agencies that were able to continue broadcasting during the hurricane because they knew what was going on. I would encourage the emergency management folks to continue using those towers and to put up what we call emergency towers called 'jack-ups.' If you have a hurricane coming, the towers lay down until the hurricane passes, and they jump back up when the storm's gone, and they contain their own power sources so that they can broadcast and monitor when the power's down.
How much extra would that cost the state?
Not cost hardly anything to do. It's fairly cheap to do. They're doing it in all parts of the world. It's military technology. Fairly simple to do.
I know the present commissioner tried to do this, but he was a little late in getting it done, to encourage people to review their policies every year, to be certain what they had. I would even go so far as to say if you're going to live in a high storm area that policyholders must initial all of their policy. Most of them don't want to do it, but it eliminates any guesswork. It eliminates a lot of lawsuits, and it eliminates a lot of disagreements about what I had or didn't have.
What of fraud?
A lot of people have asked me about the fraud position. The insurance commissioner does not have the authority to do criminal investigation prosecution. That's the AG's job. The commissioner can only investigate complaints of fraud, so most of the fraud that's committed in insurance is usually in fire and we have fire investigators that are outside the realm that the department controls. There are some things that can be done in the fraud division. A lot of the fraud used to be regarding worker's comp, but the commissioner really doesn't handle that anymore.
I want to talk about worker's comp for just a minute.
It's your cell phone bill. Get to it.
In 1991 another one of my businesses was a timber business. My worker's comp doubled, and I got together with two other companies, and we formed the Mississippi Manufacturers Workers Comp Pool. At that time, in 1991, there was only one company writing workers comp in Mississippi. They controlled the market. Two other companies formed the pool. Took us a day to do it. We got us an underwriter, and today that worker's comp pool has over 275 manufacturing companies in the state. They cover over 20,000 men and women who work in the state. I don't get any income from that. It stabilized the market and brought more competition to the state and several trade unions now use the same type of procedure and companies to cover their own employees. I'm talking about the Homebuilders of Mississippi, the Realtors of Mississippi and different trade unions. We were the forerunner in this. We've been on the frontline. That's how you bring rates down, through competition and through innovative ideas and private industry.
I think you and Anderson both plan to reduce prices through increasing competition.
(Anderson) just mimicked me. He has to be real general on his plan to increase competition because he doesn't have one and we do. If you read his article, even the one you wrote on him, he never really talked about how he was increasing competition. He just said the state has a good book of business. You can't do that. You have to really sell the state, and you can't just let one personal injury lawyer control the state of Mississippi.
Hmmm? What about personal injury lawyers?
The danger I see is if the special interests backing my opponent win, then every personal record and every insurance record in the state will be open to these personal trial lawyers and personal injury lawyers, and I don't think the people in Mississippi want that to happen.
What access would lawyers have? I thought the insurance commission regulated the insurance industry, not trial lawyers.
I didn't say they did. I said they regulate the records.
Do you really think that's a possibility? That doesn't sound all that legal.
I think that's what the issue was between Judge Senter and him making his rulings, what that was about.
We'll get back to that. Promise. What do you think of Lott's recent call to repeal the insurance industry's antitrust exemption under the McCarran-Ferguson Act?
The McCarran-Ferguson Act provides some anti-trust exemption to the companies. It does not provide anti-trust exemption for common adjusters so that's something that has to be worked on when I talk about adjusters. The repealing of the McCarran-Ferguson Act would not be in the best interest of the state of Mississippi because different states have different laws and regulations concerning insurance, and if you went to one federal system you would end up with only three or four companies in the whole United States who would be able to write insurance. That's what it would come down to if you repealed the act and made a federal charter to go with it.
I thought the exemption only allowed them to share information about policyholders' history. What's the connection to an emerging monopoly?
Right, that's all it does. It gives them non-exemption for things like common adjusters, but we'd have to work on that issue. I just used one example, and not a lot of them.
There are still a few lingering complaints Dale's mediation attempts didn't resolve anything, that Dale had no teeth in dragging the companies to the table. Dale could sit them down but some coastal residents claim it was like the companies knew Dale couldn't make them adhere to anything they weren't happy with.
Well, in some cases it didn't work. Policyholders were still denied coverage or payment of their claims, and I don't know what percent of the claims have been paid. I know most of them have been paid, but as commissioner I wouldn't be satisfied until they were all paid.
State Farm spokesman Fraser Engerman told me back in May that State Farm considered 99 percent of its claims settled. Included in those settled cases, however, were claims that State Farm settled by refusing to cover them.
Well, I can't answer to that. I'm not privy to that.
I can read you his quote. Hold on a second. Here it is. He said: "Either we have made some payment, we've paid in full to the policy limits, or we determined there was no coverage because of the nature of the damage. That's what we mean when they've been closed or resolved." What do you think of that? Was that 99 percent statement fair?
As I said, I can't answer that. I don't know, but as commissioner I would not be happy until all the claims are settled on the Coast.
You'd said a few minutes ago that if your opponent won, then every personal record and every insurance record in the state will be open to these personal trial lawyers and personal injury lawyers. What records are we talking about here?
Let me straighten that out. There's a possibility—I won't say it's a definite given—but there's a possibility that records could be open to trial lawyers. … I'm talking about your insurance records, any claims you've ever had, public knowledge, claims and what kind of medical expenses had been paid out.
I didn't realize the insurance commissioner's office had access to that.
They have access to Equifax, but they don't utilize it—the same thing the state treasurer has access to. They have access to databanks and they have to be guarded for privacy. Of course, Gary Anderson might say, 'aw, that's not true. We won't try to do that.'
But lawyers have access to things like Equifax anyhow, right? And they could subpoena whatever information they need anyhow, right?
They could subpoena it, but you don't have open-record access. That's the key to it, and you've got other issues that you have to be cognizant about that people may have access to. You know, they sell the records to the highway patrol of how many speeding tickets you have. They're sold to the insurance companies, and that determines your driving record.
Who dares sell my proud, lengthy list of speeding tickets?
I don't know specifically, but I used to fuss about that a great deal in the Senate.
What do you make of the insurance industries close ties with the stock market? Trial lawyers argue that rates went up considerably during the economic problems of a few years ago because the insurance industry made big losses during the recent recession.
I'm not privy to that. I don't have enough information to say whether that's true or false. Economically, I know they have been accused of it, but it would be hard for me to say it's a true statement because I don't have the data in front of me to say yes or no. I think that somebody saying that's true would be shooting from the hip, and I don't think you should do that. As a state office holder you wouldn't have the power to deal with that, anyhow, but as insurance commissioner you do have the power to regulate the rates and the companies, and that's very important. The commissioner has the power to regulate the companies' rates and to provide a fair market for the state.
Speak on the insurance bill of rights. That was your idea, right? When did you devise the concept?
Texas has an insurance bill of rights, and we've got about anywhere from 22 to 24 points that we need to cover, that they have a right to have access to the records to know why their claims are denied. Very basic rights. To know what they're covered or not covered for, and that brings us back to my earlier statement, that policies need to be simple, unambiguous, and understandable.
Rep. Jamie Franks said, if elected, he would make insurance coverage a serious issue in the Senate if he wins. He said, "We'll look at what kind of reform they've had in other states and come up with some alternatives that will help the people of this state right now when it comes to paying insurance premiums." Do you think you could work with him as lieutenant governor?
Yes, it would be easy to work with him. Actually, Franks' camp has been in touch with me on my insurance plan, which we did have posted on the Web, but we pulled it and put it back up in October. Some of the ideas were being plagiarized—which is flattery in itself, I guess.
Is this another reference to Anderson?
The only plan my opponent has is the plan I've got.
I'm gonna tell him that, and he's gonna show up at your house with a baseball bat.
I wish he would. Maybe I could get him to debate. The Stennis Institute has asked us to debate at Mississippi State, and he turned them down. I say, "you pick a date, and I'll be there."
What's your opinion on the lawsuits the AG launched against the industry? Did they help or hurt things?
The attorney general is charged with the responsibility to protect consumers of the state of Mississippi. He is the criminal division arm for the insurance department. The insurance department does not have any statutory authority to prosecute matters of criminal content. That's his job, and if he felt justified to sue the big insurance companies, that it was in the best interest of the state of Mississippi, then he should've sued them. Although, I don't think anything has come out of those suits so far.
Would you have preferred change to come through regulation as opposed to suits?
I think a great deal of it could've been solved through regulation. I won't say all of it could have, because the cases get rather complicated, but you might could've prevented some of the lawsuits through regulation.
Hood got accused of politicizing his fight with insurance companies during the aftermath of Hurricane Katrina when he called them "robber barons." He said they were unafraid of government. Do you think his statement was accurate?
No, that's not true. I think they're just as afraid of government as anybody out there is. The government's job is to regulate and make certain that the consumer is protected. The government's job is not to supplant private enterprise, with government run programs. Now let me be very clear on this. No state can survive without insurance. It's easy to condemn and complain about insurance companies, but the reality is that you still have to have them in order to acquire bank loans, transact business in the state, and attract industry and jobs to the state, such as Toyota and Nissan and the helicopter plant. Insurance is a critical part of our economy. It's critical to the restoration of the Gulf Coast, even though some people on the coast are not happy with insurance companies or their settlements. I think if you just look at the number of homes on the coast that have not been re-built because of the unavailability of affordable insurance you begin to understand that an economy cannot move without available and affordable insurance.
You're saying demonizing the industry is not the way to go?
You have some companies that have not done what they should've done, but by and large, I think most insurance companies have tried to do the right thing.
Let's address some of the other team's accusations. You're probably eager to address Anderson's focus on your history with MAEP.
I wrote the MAEP bill when I served in the House before my time in the Senate, so I probably understand the Mississippi Adequate Education Program formula better than any other legislator in the Legislature. I have pushed for full funding, which we have accomplished in the 2007 session. I also did a complete study again on the program in 2006, and we have passed legislation that guarantees funding of the MAEP formula for the next three years, taking politics out of it. It's hard for anyone to criticize my stance on public education. No legislator can say they have seen more money put into education under their watch than I can. In the last four years alone, as chairman of (the) Senate Education (committee) we have put in excess of $500 million. That's an increase of over 25 percent from $1.5 billion to over $2 billion in funding for education. In the eight years that I've been vice chair of education, teachers have received a 33 percent pay raise. I don't think you'll see my opponent criticizing my actions regarding the funding of public education in the state of Mississippi.
Nancy Loome, of the Parent's Campaign says you voted one time for MAEP full funding in the last four years. What's your response?
My response to that is they are picking and choosing votes on resolutions and documents, and I could say the same thing about everybody in the House and the Senate that did not vote to take a bill totally out of Senate conference. They take the position that if you voted to send a bill to conference to work out differences that you voted against the bill. I think that is very wrong. I think if the Parents' Campaign makes a stand that I have not done right, then they are saying something that's untrue.
Anderson's campaign is happy to toss around your past stance on the grocery/cigarette tax swap.
The issue on the grocery tax swap is that they're debating about a vote on a resolution of rules in the Senate as a vote against the tax. Those are two different animals. I've said that before. But it's easy to characterize that and confuse the public and say you're against something, but with a 15-year legislative career, they suddenly pick, when you're running for another office, to criticize you about a vote. I think it's been made very clear by other candidates, and even the governor, that no-one can tell you, even today, what we would take in on cigarette taxes to offset the loss in grocery taxes. Even the state tax commission cannot do that. And I think they also overlook the fact that I introduced legislation and a resolution to require the tax commission to adequately certify how many dollars would be lost or cut from tax revenue if we cut the grocery tax and how many dollars would be brought in if we increased the cigarette tax. The only thing that could be given to us at the time were estimates, that I don't think were accurate.
What year was that you're saying the estimates weren't accurate. There were different versions of the same bill over the course of two sessions.
That was the year 2006 and 2007.
So you're speaking on the year you did not agree to force the swap bill out of (Sen. Tommy) Robertson's committee.
Didn't the Municipal League of Cities say they were just fine with the bill in its form that year, that they trusted the numbers and didn't expect municipalities to take a hit from it? I think that was one of the major arguments against the bill, that cities and rural communities would suffer for it.
No, you need to understand that what they came out for was the bill as long as the Legislature restored the cuts to the municipalities through the general fund. I still think that was in question. You can't just arbitrarily move something from one place to another. I think it was still an apple when people were calling it an orange.
I think your opponent is trying to paint you as some kind of yes-man for the governor. Are you willing to oppose the big guy's opinions, if necessary?
I think I've been doing that for four years, when I said over and over that I was for a cigarette tax. Did you ever hear me say I wasn't for a cigarette tax? You'll not find me coming out against it. I've always said I was for a cigarette tax. I opposed the governor on public television.
Yeah, but wasn't that kind of a safe stance? After all, you can rest assured that conservatives dominating the Legislature would oppose a tax increase, fully backed by Mr. "No new taxes."
No, it was not a safe stance. It was a stance that needed to be taken. I believe we need a higher cigarette tax in the state of Mississippi. I've introduced bills to do that.
But during those times you and Barbour parted ways, when was your opposition successful?
I don't think I've been against that governor that much, although me and him disagreed on funding issues regarding education and in the long run I think we all ended up agreeing on what was done on funding, and that was just a matter of working the kinks out and learning what the revenue estimates would actually be.
An example of that would be in 2004, when we had to raise the revenue estimates, and if you recall we were coming off a $700 million shortfall in the budget and people were nervous about whether we would have the money and I held my ground on funding and basically we won on education, and it's ironic that the very people that have been helped the most, the teachers, would be used as pawns by the Parents Campaign, using issues that don't even relate to the insurance job helping to defeat somebody who's helped education.
Your opponent would try to cozy you up with the industry. What's your BIPEC rating, 96 percent?
My BIPEC rating for 15 years has been one of the top five in the Legislature, consistently, and that's very unusual for someone to have a pro-business rating that high for 15 years.
Can you be for consumers' rights while being so BIPEC blessed? The two seem mutually exclusive. Isn't there a contradiction there?
No, I don't think so.
Some would say you can't represent the industry and consumers at the same time.
I think that's what legislation is all about, what's in the best interest of the state and the citizens of the state. The idea is to try to be fair to all of them, consumers and industry.
But you see the contradiction, don't you? BIPEC endorses you because you vote heavily in favor of the things that industry likes and against the things that industry dislikes. Industry likes little to no regulation, but insurance commissioners regulate. That's what they do.
BIPEC never has a desire. BIPEC strictly rates legislators on what they do for economic development in the state. It has no ranking about a position on whether you like widgets or don't like widgets. It has to do with how you vote on economic development in Mississippi, what's fair for business, behavior-wise and environmentally, and many times BIPEC will take a position that is contrary to industry positions.
You mean BIPEC is sometimes pro-regulation?
They may take a position that is contrary to an industry, but BIPEC generally does not … try to dictate any policy. They rank legislators based upon their votes and their ability to try to drive economic development in the state and bring a balance between the consumer and business.
BIPEC has never adopted a stance either against regulation or for regulation regarding any certain industry?
BIPEC simply rates—not that I'm aware of. You need to call (BIPEC President) Richard Wilcox and ask him, but my understanding is that they just rate legislators based upon their votes and their effectiveness in the legislature. They don't promote policies that I'm aware of. They've never asked me to change a vote on something.
Would you accept money from the insurance industry? Would you take money from the industry you would regulate as insurance commissioner?
I've always said, since back in April and May, that I have not taken any money from agencies at this point, because no one has given me any, but I will take money from insurance agencies. Mr. Anderson pointed out that I took money in previous years from insurance agencies, and I have. I took a check from my own agency, and I'd take one from every agency in the state if they want to send me one, and it's legal. I will not accept a check from big insurance, such as State Farm, Nationwide or Allstate. There is a difference. I've been very clear on that. Anderson says the same thing in his pledge, that he'll accept no money from big insurance or their executives. He doesn't say anything about the insurance agencies. … The reason is he's been representing a company that actually owns an insurance company. So, in essence, for four years, he's been lobbying for an insurance company. Acclaim, Inc. That's the company. It's a matter of public record.
He bypassed the question at a recent forum by saying he doesn't do it anymore. If that's the case, why would he want to criticize his opponent for taking insurance company money in previous years? None of that makes sense. He says he's not in anybody's pocket, but he's a big benefactor of one PAC in the state of Mississippi. One personal trial lawyer, and in addition to that, he has no plan other than what he's plagiarized from his opponent. He hasn't told how we would increase insurance competition in the state. He was a Johnny-come-lately, getting on the bandwagon for an all-peril policy or a federal safety net, but I've been onboard with that since May. He got onboard with it two weeks ago. Tried to make a public press announcement.
Remember Hood's suggestions to legislators to pass a law mandating an insurance company selling auto insurance to offer housing coverage as well if they offer the coverage elsewhere?
You don't want to make it mandatory. You should offer the option to the policyholder the right to buy not only automobile, but also homeowners, but you shouldn't make it mandatory that they have to buy from one company. What happens is company say "We're not going to write you" unless you buy your homeowner's from us. We're seeing that in some areas. They make the policyholder buy a second policy if they are to have the first one. The consumer doesn't get a better deal. The best deal is when they can get the best rates in homeowner and casualty insurance, from more than one company if they need to.
That's interesting. So if the Legislature had acted upon Hood's suggestion that would have opened the door to forced multi-policies with one company? Are you sure?
It would make monopolies easier and would've resulted in increased rates for the consumer. The government does not need to over-regulate. … Louisiana made it mandatory to reduce some insurance rates, and what Louisiana experienced after the mandatory reduction is that some companies are refusing to provide coverage, which is their prerogative to do. Government cannot make them provide coverage. A company can decide to pull out of a state and there's not anything the government can do to make them stay.
What are some other issues you will press for as commissioner?
I've been a big proponent of the rural fire truck program. I believe it's crucial that we have adequate fire protection in the rural places of Mississippi, to keep our insurance premiums lower than the Level 10. Our goal is reduce them down to a nine or an eight, at a minimum, and save lives and properties at the same time. We have one of the highest incidences of fire deaths in Mississippi and that's due to a lot of the housing that we have. In that regard, I've helped pass building codes to protect lives and property in the state and as insurance commissioner I would require the boards of supervisors to spend the premium tax rebates for fire protection that are received on fire protection and not on building roads and not on building new roads and trucks and cars for themselves.
Another thing is we need to have a very good understanding between the Mississippi Emergency Management Agency and the Fire Marshal's office on who has access to first responders and volunteer fire departments' personnel and equipment. You need to have a catastrophe plan in place that you can use in the case of an act of God such as a hurricane or tornado. Sometimes you have advanced notice, but you wouldn't get that in the case of a terrorist attack. There needs to be better funding for first responders in the state.
What can a commissioner do about that? The money is appropriated by the Legislature.
The legislature approves the funding, but the funding comes from taxes and fees that are paid by insurance companies, and we need to look at what is charged the companies for doing business in Mississippi. … The other thing I want to do is ask the Legislature to consider if the job should be appointed or if it should stay an elected position. The fact of the matter is that's not a decision that should be made by the commissioner, but by legislators. I personally think that it ought to be appointed because 44 states and territories that have an appointed commissioner have lower rates, by and large.
Why would that be, you think?
When you appoint someone you usually appoint an expert in the industry, but the drawback to appointment is that the average tenure of appointees is about two to three years. They don't stay as long as elected officials. There are only 11 states who elect insurance commissioners.
Who appoints them—the governor?
You have a commission that selects them, similar to what we do with the superintendent of education for the state. We use the state board, and they're appointed by the governor and the lieutenant governor. All the states are not the same, but the best appointments are those that consider qualifications, and you choose from a very narrow list of people who are qualified to run a job.
I've never presented a plan. It's just something that needs to be looked at, and I personally feel it should be considered because of the rates of other states with appointed commissioners.
What if the commission appoints you with Gary Anderson?
I once asked him if he would take the insurance commissioner job if it were appointed and he said, "no, I wouldn't want to be appointed again. I want to be elected."
I've thought for quite a while that the Insurance Commissioner general election contest was going to be interesting. Four years ago, I voted for Gary Anderson for State Treasurer because he was much more experienced than Tate Reeves. To me, a vote for Anderson in 2003 was a no-brainer.
I believe that Mike Chaney is a much stronger candidate in this race than Reeves was against Anderson four years ago, which means there's no such thing as a "no-brainer" vote here.