“What has happened with auto insurance rates in South Carolina should be the ‘gold standard’ for what can be accomplished with other types of insurance,” Elanor Kitzman, South Carolina Director of Insurance told members of the Independent Insurance Agents and Brokers of South Carolina March 22 during the group’s 2006 Spring Conference in Columbia.
“If competition is encouraged to come into the state, we should be able to attain that level of success with other types of insurance,” Kitzman explained. “The competition is the same, the concept works, if only we give it the opportunity to work.”
Kitzman said she thought the prices of coastal homeowners policies would rise after last year’s hurricane season and that she expected some companies to cut back their coastal business, but was pleasantly surprised when it wasn’t as bad as she expected. She said, however, that companies could still reassess their positions predicting, “We haven’t seen the last of rate increases in coastal areas.”
The director said she hopes to encourage new carriers to come into South Carolina.
“No one can expect to see this happen within a short period of time, but it will be likely within two or three years, because carriers view South Carolina as a favorable place to do business,” Kitzman explained.
She said she has been talking to one takeout company from Florida and is optimistic it will decide to write business in South Carolina. Kitzman said she is trying to convince them to come to the state to write surplus lines in an admitted market.
She suggested they develop modeling alternatives under which it would be possible to write more lines and increase their overall ability to write more coverage. Kitzman said there are no regulatory barriers in South Carolina and pointed out that often, internal company underwriting constraints are harder to deal with than external ones.
“We don’t want to wait for another year like last year,” she said.
According to Kitzman, South Carolina’s wind pool is very stable, well-managed and considered to be one of the best.
Workers’ Comp Fatigue
Kitzman said that when workers’ compensation rate hikes of 32.9 percent were requested, and after spending months preparing for an appeal of her refusal to allow the increase, she got “workers’ compensation fatigue.”
She expects the hearing to be April 24, and said there would also be a hearing about assigned risk/voluntary rate requests that she expects to be heard soon after the workers’ comp appeal.
“I am trying to level the playing field,” Kitzman explained. “It doesn’t make sense that voluntary rates have gone up and at the same time assigned risks have gone down.
Had no agenda
After being appointed Director of Insurance last year by Governor Mark Sanford, and just completing her first year as South Carolina’s Director of Insurance, Kitzman said it took her several months to determine the roles of employees in the department. She said that when she was appointed she had no agenda or set plan.
Kitzman’s first conclusion was that she needed more than two deputies so she would have more feedback and have an employee devoted exclusively to financial services.
“Financial services and solvency are very important,” she said.
Last August, Kitzman announced a major reorganization. She hired a new deputy and had some vision about where she was headed. But, she said, she had a lot of black boxes to fill with employees. Now, she said, all the boxes have been filled with knowledgeable employees.
She said her next goal will be to catch up in automation technology by initiating an online license renewal system.
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