Off-year election 2007 could provide glimpse into 2008

This fall is an off-year election season with only a handful of federal races and most state houses gearing up for contests in 2008. However there are some races — a hotly-debated referendum in Washington and key elections in Mississippi, Kentucky and Louisiana top the list — that insurance lobbyists are watching not only for the immediate results but also for hints as to what might be in store in 2008.

The Democratic Party holds 28 governors’ seats, while the Republican Party holds 22. In a few states, state lawmakers and insurance commissioners face voters.

Some of the states whose results the insurance industry will be watching over the next month include:

Kentucky

Not surprisingly, Julie Mix McPeak, Kentucky insurance regulator, declined to comment on her state’s gubernatorial contest between Republican incumbent Ernie Fletcher and Democratic challenger Steve Beshear, which will come to a head on Nov. 6.

The executive director of the Kentucky Office of Insurance is appointed by the sitting governor so McPeak’s position could be contingent on Election Day results.

Mired in controversy stemming from hiring practices early in his first of two terms, Fletcher is facing a formidable opponent, who pundits lean toward for a November win. Current polls show Beshear with a double-digit lead over Fletcher, although most pundits expect that the margin may be close.

Health insurance issues and Medicaid reform are relatively high on Fletcher’s list while voters place the matter of job creation above all.

A long-time elected official, Beshear is not immune from past controversy. His former law firm says recent interest in a 12-year-old ethics report involved in the firm’s role in dismantling Kentucky Central Life Insurance Co. in 1995 is fueled by politics.

Louisiana

Both the governor’s and insurance commissioner’s offices are among the posts up for grabs in Louisiana’s 2007 statewide elections. The primary is set for Oct. 20; if needed a run-off election will be held Nov. 17.

Democratic Gov. Kathleen Babineaux Blanco opted not to stand for re-election after guiding the state through the aftermath of back-to-back 2005 hurricanes, Katrina and Rita, and pushing coastal recovery efforts since that time. While Blanco’s performance has garnered both praise and derision, her efforts — along with those of Republican Insurance Commissioner Jim Donelon — to negotiate market-driven solutions to Louisiana’s property insurance problems have generally elicited a positive response from the insurance industry. The two successfully convinced the state legislature to abolish the Louisiana Insurance Rating Commission and implement a $100 million incentive plan for carriers willing to take over business from the state’s insurer of last resort Citizens Property Insurance Corp.

There are four main competitors for Blanco’s job: Republican Bobby Jindal, a U.S. congressman for the First District of Louisiana; Independent John Georges, a New Orleans-area businessman; state Sen. Walter Boasso, D-Arabi; and Public Service Commissioner Foster Campbell, D-Elm Grove.

Jindal, who lost to Blanco by a narrow margin in the 2003 gubernatorial election, is thought to be the front-runner. The results of an Oct. 1 – 7 poll conducted by Southeastern Louisiana University’s Social Science Research Center showed 46 percent of registered voters favored Jindal. However, the same poll showed that 29 percent of voters were undecided.

In his bid for re-election as insurance commissioner, Donelon faces three other candidates: James “Jim” Crowley, a Shreveport Democrat; Robert Lansden, a Republican from Covington; and Jerilyn Schneider-Kneale, a Republican from Slidell.

Donelon is the most well-known and well-funded. According to the Associated Press, Donelon has more than $300,000 in his political campaign fund. He has been chided by the other candidates for accepting donations from the insurance industry. Donelon was appointed to the post by former Insurance Commissioner Robert Wooley upon Wooley’s resignation in early 2006 and won the office in a special election later that year.

Massachusetts

In one of the few federal races, there is a special election on Oct. 16 to fill the U.S. House seat being vacated by Rep. Martin Meehan, a Democrat. Democrat Niki Tsongas, wife of former U.S. Sen. Paul Tsongas, is facing Republic Jim Ogonowski, brother to a pilot killed in the 9/11 terrorist attacks. Massachusetts has had an all-Democratic congressional delegation for more than a decade, but if Republicans are to make gains this conservative Democratic district could be where they start.

Mississippi

With residual effects of Hurricane Katrina still ringing through Mississippi Gov. Haley Barbour’s office — in a positive way for his campaign — political analysts generally concur that the incumbent will win a second term on Nov. 6.

Barbour’s challenger, Democrat John Eaves, a Jackson trial lawyer, accuses the incumbent of being in bed with “big insurance” and is vowing to “protect our people against greedy money changers like big insurance, big oil and big tobacco.”

While Barbour is buoyed by his post-Katrina recovery efforts, Eaves cites the issue of thousands of Mississippi families still living in FEMA trailers more than two years later, lacking necessary resources to rebuild homes that were destroyed.

“You can’t represent the insurance industry in Washington and then look out for the people of Mississippi,” Eaves said. “You can’t take their campaign donations and then make them do what’s right.”

Both candidates have health insurance high on their list of issues. But neither will have any say in who heads the Mississippi Insurance Department, as the position of insurance commissioner will be determined by voters on election day.

This year’s race for Mississippi Insurance Commissioner is underscored by the end of a 32-year reign of George Dale — the longest for any commissioner in U.S. history — as Republican Mike Chaney and Democrat Gary Anderson vie for the office.

Anderson touts his refusal to accept campaign funding from any corner of the insurance industry, while accusing Chaney of doing just that. In the latest campaign finance reports however, Anderson has raised a total of $394,930 while Chaney’s camp raised a total of $367,467.

Chaney wants to increase competition in the private insurance market to draw insurers who fled the state in the aftermath of Hurricane Katrina, back to the coast. Enforcement of tighter building codes is also high on Chaney’s priorities list.

Anderson says he will crack down on fraud and will work to maintain the Insurance Department’s independence from the industry that it regulates.

At this year’s polls, Mississippi voters also have the responsibility to choose their next attorney general: Democratic incumbent Jim Hood or Republican challenger Al Hopkins.

Hood has been deeply involved in ongoing insurance litigation issues stemming from Hurricane Katrina in 2005. “I will continue to fight for insurance relief for thousands of Mississippians whose homes and businesses were damaged or destroyed by Katrina,” he said.

New Jersey

The entire Assembly and Senate in New Jersey — 120 legislators in all — will face voters in the Nov. 6 general election. Democrats currently control both houses as well as the corner officer with Gov. Jon Corzine. Democrats have 22 Senate seats compared to 18 for Republicans. In the Assembly the score going into the election is Democrats 50, Republicans 30. Republicans could pick up a few seats but Democrats are expected to retain control. Despite new reports of corruption, including a major case in which the FBI set up a bogus insurance agency to snare 10 Democratic officials, voters polled by Quinnipiac University said by 54 percent to 35 percent they are not more likely to vote for Republican candidates.

Virginia

In Virginia, Democrats and conservative Republicans are in a battle for control. All 140 state senators and delegates are up for election on Nov. 6, and the stakes are high. Democrats (17) need only six seats to take control of the Senate from Republicans (23). Democrats’ challenge is greater in the House of Delegates where they now have only 40 of 100 seats. Republicans hold 57 and Independents 3. Gov. Tim Keane is also a Democrat. Fiscal conservative Republicans have been encouraged by wins in earlier primaries and continued debate over taxes and how to pay for transportation improvements.

Washington

At issue in the Evergreen State is Referendum 67, a ballot question that will determine whether consumers can collect triple damages if their insurer unreasonably denies a claim or violates unfair practice rules.

The issue was heavily debated by legislators, insurance industry professionals and attorneys earlier in the year, when legislators weighed-in on SB 5726, the “Insurance Fair Conduct Act.” Proponents of the bill — lawyers included — said it gave consumers a tool to fight against unscrupulous insurers who deny claims without reason.

The legislation passed and was signed by Gov. Chris Gregoire in May.

However, the American Insurance Association, National Association of Mutual Insurance Companies and Property Casualty Insurers Association of America weren’t ready to settle the fight. So the associations launched a public campaign to put Referendum 67 on November’s ballot.

The Reject R-67 campaign hopes consumers will vote “no,” once they become convinced that the law will increase the cost of insurance for individuals and businesses. The campaign says the law will create an environment that will allow “frivolous” lawsuits, and that insurers will be forced to settle more unmerited lawsuits out of fear of paying inflated awards damages resulting from a trial.

Research from Milliman Inc. seems to back up those sentiments, noting that Washingtonians’ rates could skyrocket by as much as $650 million, based on a study of states with similar laws.

Gov. Gregoire tried to broker a negotiation between the two sides before the measure was put on the ballot, but she failed. Meanwhile, the reject and approve campaigns both have been gaining supporters leading up to the vote, while taking heavier blows in the fight.

At press time, Consumers Against Higher Insurance Rates had sent out a letter to local television stations saying an advertisement by the Approve 67 campaign is “false and misleading.”

Outsiders think the money designated to campaign for the ballot battle — nearly $9 million combined — could be put to better use. But it’s safe to say both sides will continue to duke it out until Election Day.

Topics USA Carriers Legislation Louisiana Hurricane Washington Mississippi Market Kentucky