Oregon Insurance Division Administrator Kipper Steps Down

Oregon’s Department of Consumer and Business Services (DCBS) announced that Scott Kipper, administrator of the Insurance Division, left his position on Oct. 31, 2008, to pursue other interests. Yet before he left, Kipper sat down with Insurance Journal‘s Ken St. Onge at the recent National Association of Insurance Commissioners meeting.

Kipper talked about the state’s vibrant workers’ compensation marketplace, homeowners’ insurance rates and relationship with independent agents. Following is what he had to say.

Meanwhile, the department announced that Deputy Administrator Teresa Miller is serving as acting administrator while it evaluates the division’s future needs.

What does the bailout of AIG means for Oregon’s insurance community?
Scott Kipper: It’s really not much of a bailout as much as it’s just a continuation of business as usual. AIG, the holding company, was the company that was imperiled or impaired. As a holding company, it held companies in a number of different subsidiaries, about a third of which were insurance companies.

The holding companies were regulated at the federal level. However the insurance companies that were the subsidiaries were regulated at the state level, and as such, we were responsible and remain responsible for those companies’ continued financial solvency.

I’m happy to tell you that those companies were never, ever in peril. In fact, they’re seen as the “gold bricks” in the vault, if you will, of AIG, that will enable the carrier or the company to prosper eventually as it sells off good pieces to pay back that federal bailout and the federal loan.

What kind of footprint does AIG have in Oregon?
Kipper: I believe there are 70 or 71 companies that AIG owns that are insurance companies; 43 of those were admitted to do business in Oregon. Those 43 companies represented roughly 3 percent of our property and casualty marketplace, 7 percent of our life and annuity marketplace, and a little more than 9 percent of our workers’ compensation marketplace.

Tell us a little bit about the workers’ compensation market in Oregon.
Kipper: We have one of the most vibrant workers’ compensation marketplaces in the country right now. Our rates held steady again — I don’t know how many years in a row this has been, but it has been for some time that we’ve had either decreases or held steady as far as rates go.

Those are a result of some reforms that were done several years ago under the then Insurance Commissioner Ted Kulongoski, who is now governor. He’s quite proud of the fact that our workers’ compensation marketplace is not only great for those businesses, but also very competitive as well, and our rates show that.

What about other lines of property/casualty insurance?
Kipper: One of the real success stories for Oregon is our homeowners marketplace. Our homeowners rates, shortly after I started in December 2007, were at that point among the second-lowest average rates in the country.

That’s a response to not only how well we’ve managed and our carriers have managed the risk, but also to the cost of living. Combine those two, and we have a very vibrant property and casualty marketplace.

Oregon has quite a coastline. Have you had any coastal insurance issues?
Kipper: Not to my knowledge. The reason we don’t see that is there’s not a great deal of development right on the coast. Most of the coast is publicly owned, and therefore those particular issues are somewhat mitigated.

Oregon is not necessarily in a catastrophe-prone area, but what issues come up?
Kipper: A couple of things: During the past two winters, we’ve had two significant windstorms that caused a great deal of damage. We also had a significant flood last year in a little town called Vernonia that created some very specific insurance issues for that area.

There was a special session that was held by the Legislature this February. One of the bills that came out of that was a directive for the division and for the department to draft rules to address what happens in the event of a catastrophic event, which we’ve done.

We’ve drafted those rules and now are getting prepared to draft some directives to have in place so that if another catastrophe takes place, we can pull those directives off the shelf and put them into use. The good thing about this is we have a very collaborative group of stakeholders in our state. By stakeholders I mean consumers, consumer groups, producers and carriers.

We have worked [together] in the past, and with this process, worked together to put this directive together that would allow some very good regulatory oversight as to what happens during an emergency, but also give those stakeholders a heads-up as to what to prepare for when a catastrophe does strike if those emergency rules are invoked.

How would categorize your department’s relationship with agents?
Kipper: We have a great relationship with agents, and that’s all the way from our licensing area on up to our administration. Oregon has a history of being very collaborative, working with our stakeholders.

We have a number of producers on a couple of our insurance advisory committees. They’ve been very helpful in giving us the heads-up or pointing out areas that we need to focus on. We have — certainly I have — an open door policy, and meet with agents and agents groups on a very regular basis.

Topics Agencies Workers' Compensation Property Casualty Oregon AIG