An effective National Disaster Program has to be found so that if there is a catastrophe, we won’t have to rely on an “Air Force One Policy,” in which Air Force One flies in and brings us $20 billion, Alabama Insurance Commissioner Walter Bell told members of the Alabama Independent Insurance Agents during their 19th Annual Legislative Conference hosted by AIIA’s Young Agents Committee in Montgomery, Ala.
“That policy is not working,” Bell said. “It is costing you, it is costing me, and it is costing all the taxpayers in this country. We need a plan that you are actively involved in, that we are actively involved in, and one that is going to work for the consumers.
“Nobody wants to go through another Katrina, but hurricane prognosticators say we will have a very, very dangerous season this year.”
Bell, who in December will take over as president of the National Association of Insur-ance Commissioners will be trying to put together a National Disaster Plan.
“Will it be the Protect America Plan suggested by Allstate Company? Nobody knows at this time what plan it will be,” Bell explained. “Will we put everything into the same policy? Who knows?”
Flood program needs fixed
Bell said somebody needs to do something about the National Flood Insurance Program.
“We can not continue to put $23 billion into a program that is broke,” Bell exclaimed. “Some-how we have to come up with something new. In Japan they give people a tax deduction for buying earthquake insurance, that is something we need to look at to encourage people to buy.
“If you don’t encourage them to buy, then the federal government comes in for the ones that have not bought insurance,” Bell said. “We see this all the time, they see FEMA putting out money for a $480 a night hotel, and say, ‘Why do I need insurance.’
“We have to change that mindset in this country,” he said. “People have to be aware the government is not going to take care of them anymore to give them incentive to take care of themselves.”
Bell outlined what the insurance department has accomplished and is attempting to do in the Alabama Legislature. He said a licensing bill that allows agents to obtain licenses for two years, as opposed to one year, has passed the House and is expected to soon pass in the Senate. (See legislative details on page 57.)
Online registration
Bell said online registration and licensing will be a huge efficiency for the Department of Insurance.
“It means we will only have to license 30,000 people each year, as opposed to 60,000 per year,” Bell said. “This will increase departmental efficiencies, I will be able to put two or three people that were previously busy renewing licenses onto consumer protection handling consumer complaints and consumers’ issues.”
Bell complemented agencies, saying he receives letters from consumers saying agents are doing a good job, so it’s not all complaints.
Proposal requires fingerprints
Bell said a NAIC issue he will tackle is a proposal to require insurance agents to be finger-printed. He said there are a lot of unanswered questions about this procedure, like will there be a repository in which fingerprints will be housed from all states, and if so, where will it be housed.
Intrastate compact
Bell said speeding the market for an intrastate compact will be the next step NAIC will look into.
“It’s a little more difficult to do national uniform standards for property and casualty, and personal lines than it is to do life and health,” Bell explained. “If you are a 50-year-old in New York and Alabama you are going to pay pretty much the same premium if your health is the same.
“We have a working group looking a personal lines to come up with something, but as you know, automobile rates in New York City are much more different than they are in Alabama. It’s much, much different.”
He said in terms of policies you have to take all kinds of variables into consideration.
Against federal charter
Bell opposes a federal charter. “On the one hand for consumer protection, on the other hand, if in fact we had a federal charter I don’t know how often we would see a federal commissioner coming down to Alabama,” he said. “We think the best is the government that comes closest to the people and being in Montgomery is the one that is closest.”
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