Having an Insurance Commissioner who is willing to stand up to the insurance industry can save consumers tens of millions of dollars.
A settlement reached this morning between the insurance industry and the Dept. of Insurance reverses a 9.4% rate increase, bans all further increases into 2011, and requires insurance companies to return $50 million to consumers with interest.
That’s $102 in the pocket of an average driver in Durham, $92 for an average driver in Raleigh, according to the Department.
Simply put, North Carolinians would not be receiving these rebates if the Commissioner of Insurance had not been willing to spend months fighting the insurance industry’s proposed rate increase in court. If the Commissioner of Insurance was in the pocket of the insurance industry, we would certainly not have what the Department calculates to be the fifth lowest auto insurance rates in the country.
The fact that Commissioner of Insurance Wayne Goodwin ran under our state’s Voter-Owned Elections program last year helps ensure that we have an insurance regulatory head who is willing to stand up to one of the most powerful industries in the state . The program allowed Goodwin and his Republican opponent John Odom to raise less than 5% of their total campaign money from the insurance and other Department-regulated industries. Compare that with the 66% of campaign money former Commissioner of Insurance Jim Long received from the industry in 2004, according to a study done by NC Voters for Clean Elections.
So let’s do the math. NC consumers will save $50 million in insurance premiums this year, in part, because we have a state insurance commissioner who is not dependent on campaign money from the insurance industry. The program that facilitates this independence costs the taxpayers less than $800,000 per election cycle or $200,000 a year over four years. That’s a 25,000% return.
Now you might question whether Voter-Owned Elections is really what made the difference. After all, maybe a candidate who had received two-thirds of their money from the insurance industry would still have challenged the proposed insurance hikes, as Jim Long did for many years.
Maybe so. There are many good elected officials within our current system. But the question of influence and the perception of a conflict of interest would remain as long as that official was dependent on fundraising from the industry. We would wonder if the Commissioner had fought as hard knowing that he/she was going to have to ask for money from these same people two years later. We would question whether they had the same tenacity at the bargaining table. And we’d have to accept the fact that even when they were doing their very best to uphold the public interest, they were still likely being influenced in some way by the process of raising hundreds of thousands of dollars from special interests.
It’s just human nature. Or a logistical/scheduling reality (how many hours do they spend fundraising at how many parties?). Raising that much money from a single industry would affect any of us, no matter our intentions.
And that’s where Voter-Owned Elections comes in and why its so great. It makes all of these questions and ambiguities moot. By eliminating the fundraising reliance on the insurance industry North Carolinians don’t have to wonder if the industry is using donations to gain undue influence. By taking away the mere possibility that an elected official’s conduct could be influenced by campaign donations, we all can have more confidence in government.
Hopefully the General Assembly will take this lesson to heart and pass SB-966: Expanded Voter-Owned Elections. The bill would expand the public financing option to five other Council of State races including Attorney General, State Treasurer, Secretary of State, Commissioner of Insurance, and Commissioner of Agriculture.
Not only would it allow state residents to benefit from better government, but as we learned today, it might also save all of us some hard cash.