Scott Bradshaw is a dear friend and valued customer at my insurance agency. To the amusement of many a spectator and idle patron of Mimi’s Diner, Scott and I often disagree quite vocally over coffee. This is one such occasion.

Scott, if I raised your rates for writing that article or just about any other reason besides claims activity, you would walk right down the street and get insurance for the same price you are buying it from me now. Maybe even a little cheaper if they don’t ask you all the questions we did at my agency in order to get it all written right. They might also miss your daughter’s ungrateful horse. (It bites Scott when he feeds it.)

I work in a very, very competitive industry. My agency has to deliver on price, product and service day in and day out or I am dust. There is an ad for auto insurance on the television absolutely every time you turn it on. People have choices, and I believe they are competent to make the right choices based on their values.

I also have faith in my ability to compete in an open market place. You see this free market rating has two very sharp edges. An insurance company can come into the market place with deeply discounted rates and potentially wipe my agency out. I am, however, committed to the free enterprise system and have advocated in the political arena based on those values and not the safer surer path of feathering my own bed.

You automatically assume that rates have been depressed by the insurance department and that they will rise without regulation. That is not true on the whole.

There are also powerful forces that have a vested interest in keeping the regulation because it keeps lower rates out of the market place, cutting competition and fattening their profit margin.

In fact the buzz that I hear is that the rates are adequate on everything but the new version of uninsured motorist coverage that is mandated by this bill.

When this bill originally passed the Senate, it was fast and emotional, resulting from the lawyers’ spin on the issue. The issue is complicated and requires dialogue.

It is hardly a “minor technical adjustment” to the laws when the legislation would have essentially doubled the amount of money paid out by uninsured motorist coverage at the lower limits. (You have to buy me a cup of coffee at Mimi’s to get the true technical answer or be my client.)

All the insurance companies would have lined up and asked for a rate increase if this were passed, and because the loss statistics would justify it, the increase would have eventually been granted. It is the law.

Well, they were not in such a rush in the House and took a pause for thought. You called it languishing when it was actually responsible, thoughtful government. As a result you have choices that you would not have had in the original bill.

You can opt for no uninsured motorist coverage. You can select the same old coverage you had before. Or you can elect to stay with the new coverage that is what the trial lawyers wanted you to have in the original bill and of course pay the rate for it. The important point is you have a choice as a result of this process.

More to the point of the insurance industry being divided by this, David Schafer was most likely responding to the needs of the part of our industry that focuses on minimum limits of insurance. They fear that their customers will not read their mail and learn that they have a choice. Those customers would then just shop their insurance without asking questions. They are probably not wrong and face a huge challenge. The companies face a huge expense. The customers are not losers in the transaction.

Scott, your characterization of the Ryles years is way off. He spoke admiringly of the system in South Carolina. His actions as commissioner were working to drive companies from the marketplace in Georgia, and many had one foot out the door.

Unfortunately for the consumer, auto rates were double in South Carolina compared to here at the time. The system was really easy on the regulator with only three companies to watch. Interestingly enough, South Carolina has opened up to market competition, making it easy for competitors to enter, and their auto rates have dropped down to our level.

Part of our argument to the legislature is a comparison of rates in Illinois, Georgia and New York. Arguably, New York has the toughest regulation, and Illinois has had for a number of years a law similar to what we passed for auto insurance.

The New York family paid about $50 more than the same family in Georgia and the Illinois family paid about $35 less than the Georgia family in the quote. Money spent regulating the price could be spent monitoring the financial health of insurance carriers, expanding the fraud unit or expanding the consumer assistance unit. The money spent complying with this system could stay in the customer’s pocket.

This is not to say that we do not have a well-run insurance department. I can refer a client to the consumer line completely confident that whoever is wrong will be told they are wrong, and if it is the agent or company, whatever situation will get resolved. We have worked with their fraud unit. They are very effective.

Further, we have just had the blanket jerked off the post-Glass-Stegal-Act era with the credit mess and the fall of Bear Sterns. You will recall that Glass Stegal separated statutorily investment banking, commercial banking and insurance. Now we compete with each other. The Fed opening its discount window to an investment bank was the first change in the depression era financial protections since the repeal of Glass Stegal.

I cannot help but wonder what we are missing by only regulating rates. Many carriers figured out a way around it anyway, which is also a coffee and/or customer explanation.

It is time to step back and help John Oxendine figure out what the new role is in our economy and quit regulating something that will take care of itself. There was a movie once about a basketball player that was paid to turn on the automatic sprinklers ...

Rick Viall CPCU, CIC

Viall Insurance Agency

Independent Insurance Agents of Georgia Government Affairs Chairman

Peachtree City, Ga.

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