Wayne Goodwin for Insurance Commissioner

Wayne Goodwin’s WEBSITE

INDY Questionnaire

1. What do you believe are the most important issues facing the office of Insurance Commissioner? If elected, what are your top three priorities in addressing those issues?

I believe the most important issues facing the office of Insurance Commissioner are: (a) obtaining affordable, accessible homeowners’ insurance; (b) preventing insurance companies from controlling the ratemaking functions of the office; and, (c) keeping the State’s power of insurance regulation within its authority and not completely subsumed by the federal government’s tendency to have “mission creep.”

When I first ran and was elected in 2008, the number one issue then was coastal homeowners’ insurance. I described it then and rightly so as a “ticking time bomb.” Through legislation, litigation, and various direct decisions I made, our state was able to defuse that time bomb, at least for awhile. As expected, the next phase of the problem is before us: Many insurance companies will not make themselves available to write coverage on the coast unless they may charge higher premiums for the coast. Meanwhile, insurance companies have been paying out greater benefits than they expected for various storms and catastrophes across the State, including higher incidents of tornadoes and hail. As in other coastal states where carriers have been impacted by higher re-insurance costs and smaller investment returns and those storms, insurance companies are withdrawing their coverage area, leaving tens of thousands of homeowners stranded without coverage. That is further complicated by banks and other lenders that require homeowners to have insurance coverage, but homeowners are having a more difficult time finding it, unless they go to the “market of last resort” the Coastal Property Insurance Pool, also known as the “Beach Plan.”

Long story short, I’ve been steadily working on ways that meet the balancing act to address this: seeking stronger consumer protections, strengthening the Beach Plan by keeping larger reserves, promoting mitigation credits for homeowners fortifying their homes, and finding ways for any actuarially necessary rate adjustments to be done in a staggered or graduated way over time so homeowners are not all impacted in any one year with a large potential increase (as when my predecessor was in office) but may see no more than 10 percent or so in any given year, if that is in fact warranted at all. These approaches, collectively, will result in more insurance companies writing on the coast and, frankly, staying in North Carolina as a whole; fewer experiences of “sticker shock” when regular storms cause a rate impact; a smaller Beach Plan with greater reserves; and an even fairer process where homeowners’ insurance territories more directly reflect the risk.

The job of state Insurance Commissioner is one big balancing act. Even though consumer protection is the polar star for all my endeavors, by law the Insurance Commissioner must balance the needs for affordable/accessible insurance of all lines against the needs of insurance companies to make a reasonable profit, be reasonably regulated, and be free from fraud. Sometimes consumers groups push for measures that try to tip the balance, but most often every year, in fact insurance companies push very hard at tipping the ratemaking balance more to their ends. For example, on my watch North Carolina has the very lowest average automobile insurance in the South (from Delaware to Texas) and between the 5th and 8th lowest in the USA. That doesn’t happen by accident! But certain insurance companies have pushed legislators to change the laws to do such things as striking my duty to declare a rate “excessive” and prohibiting my authority to order insurance refunds back to policyholders; those attempts failed, thank goodness. Many of those insurance carriers also want the authority to increase rates automatically by 15% in the aggregate every year, without any oversight by the office of Insurance Commissioner. (That would actually result in some drivers receiving annual increases of up to 50% or even more.) I fiercely fought those attempts and succeeded in protecting pocketbooks of NC drivers and small businesses that use personal vehicles.

Of course, a grave concern about the above success in fending off insurance company efforts to tip the balance more toward them is that my challenger in this year’s election is a 30-year veteran of the insurance industry! His three decades of work as an insurance company executive plus his 10 years as a paid lobbyist give me great reason to be concerned if he is elected instead of me. With all due respect, he proclaims he is a consumer advocate, but between the two of us there is no question who is the greater consumer advocate and protector. (I have saved North Carolinians more than $1.3 Billion through rate cuts, refunds, and rebates, etc.) We do not need anyone serving as Insurance Commissioner who has been paid by, worked for, or been subservient to the insurance companies that the Insurance Commissioner regulates. We must not let the fox guard the henhouse!

Of my top three concerns as state Insurance Commissioner, I worry that the federal government is on a hyped-up trajectory of “mission creep,” whereby the roles and duties of our elected state insurance commissioner are subsumed by federal regulation. We here in North Carolina have been progressive, and have championed strong consumer protections. As the federal government even at the direction of some insurance companies who want a weak federal regulator instead of a strong state insurance regulator tries to expand its authority I am constantly battling back, arguing our case time and time again that consumer protections and constituent service is quickest and most fruitful by an insurance regulator closest to home. Furthermore, we already see attempts by the newly-created “Federal Insurance Office” in Washington, DC an office that was purported to be an information-only, powerless one to preempt the field of state insurance regulation. We need an insurance commissioner adept at fighting that, and not someone like my challenger who is a perennial candidate for this office who hasn’t been involved with any of these battles or is unfamiliar with this specific battle.

2. What in your record as a public official or other experience demonstrates your ability to be effective on the board? This might include career or community service; be specific about its relevance to this office.

My record and experience are collectively a very strong statement as to my ability to serve as state Insurance Commissioner effectively.

First of all, I’m running for re-election as NC Insurance Commissioner because I have more work to do for our citizens: Namely, I want to save us *another* $1.4 Billion in insurance rate cuts, refunds, rebates and restitution. These savings are battle victories my team and I can claim for the public, and no one else. Part of that significant sum is the $545 million in car insurance rate rollbacks, $50 million in car insurance refunds, $156 million in historic health insurance refunds and rebates, and the results of constantly fighting the bad guys. On that latter point, I’m also very pleased with my historic 600+ insurance fraud arrests that my team and I have had on my watch, and the historic, largest-ever insurance fraud bust ($5.3 Million) in state history, a series of major arrests that occurred in August. Even before those August arrests, the 600+ prior arrests have resulted in my recovering $49 million thus far for victims of insurance fraud. And, as stated above, I want to keep our car insurance rates the very lowest in the South, as they are now. I’m uniquely qualified to take on the big insurance companies in striking the balance for consumers, whereas my challenger is a 30-year employee of insurance companies and a 10-year legislative lobbyist for insurance interests.

Also of major note is my role here in North Carolina and nationally as an approachable ally on consumer protection matters. In addition to the above endeavors, I regularly appoint members of the public to boards and commissions, and I have served several years as Chairman of the Consumer Connections Working Group and Chairman of the Consumers Participation Board of Trustees in the USA. Further, I led the effort to make insurance policies more understandable by lay persons, focusing on readability standards and limiting the legalese so everyday persons are to better able understand insurance policy contracts. More recently, I successfully persuaded the legislature to require public comment periods after insurance company rate filings; whereas I already require them without need of a statute saying so, there may be a future insurance commissioner who does not believe the same and would require a statute mandating public comment opportunities.

Voters should choose me over my opponent because I have the *only* proven record of saving citizens money & fighting for you against insurance companies. I’m the only candidate running in this race with experience in political office. Unlike my opponent, I’ve never worked for an entity regulated by the Dept of Insurance: My opponent worked 30 years for the insurance industry and 10 years as a paid lobbyist. We don’t need the fox guarding the henhouse! I’m a Democrat but have a growing number of bipartisan supporters. See www.republicansforgoodwin.com, which is in harmony with my general website, www.waynegoodwin.org.

As for my academic, professional, political, and personal experiences which support my qualifications for this office, there are many. For example,

Academic: UNC-Chapel Hill School of Law — Juris Doctor, UNC-Chapel Hill — Morehead Scholar & William Randolph Hearst/U.S. Senate Scholar — B.A. With Honors in Political Science, NC Institute of Political Leadership, Center for Creative Leadership, NC Governor’s School – West (Winston-Salem)

Professional: NC Insurance Commissioner and State Fire Marshal (2009-present), Asst Insurance Commissioner and Asst State Fire Marshal (2005-2008), Asst General Counsel to Insurance Commissioner Jim Long (2005), State Representative in the NC General Assembly for four terms (1996-2004 — representing Richmond/Montgomery/Scotland/Stanly counties), Attorney (1992-2005), Richmond Community College adjunct professor (1992-1998); plaintiff’s attorney representing individuals and small businesses in their disputes with and against big insurance companies; and small business owner (1992-present)

Political: Elected statewide as NC Insurance Commissioner (2008), Elected four terms (8 years) as State Representative in the NC General Assembly (1996-2004 — representing Richmond/Montgomery/Scotland/Stanly counties), Appointee to various State boards and commissions as a private citizen then legislator etc.

Personal: I was born and raised in small-town North Carolina Hamlet. Living my early years on a farm, my father was a grocer/farmer and my mother was a textile/hosiery worker. We lived in a mobile home and, thank goodness, I had a supportive family, community, church and public school system. I was the first to attend college in my family, and chose to return to Richmond County after law school to help make the world at least a very small part of it a better place. Since then I’ve been blessed to serve in the legislature and now as Insurance Commissioner. Every step of the way I’ve never forgotten my roots, and how difficult it was wondering if we’d have the next meal, keep our home, keep up insurance payments, or generally survive the ups and downs of life. Transformational, personal experiences like those including the tragic 1991 Imperial Foods fire in Hamlet resonate and guide me. (This latter incident is especially poignant because as state Insurance Commissioner I now also serve as State Fire Marshal.)

As the incumbent NC Insurance Commissioner, I believe that my credentials and experiences and successes qualify me to continue serving in this role. I hope the fact that The Independent Weekly endorsed me in 2008 for this office is not lost on readers four years later. In my opinion, my record in office since 2008 and my vision for the next term are in keeping with the basis for that prior endorsement.

3. How do you define yourself politically and how does your political philosophy show itself in your past achievements and present campaign platform?

I’m not a big fan of labels, but if pressed on it I would say that I’m a moderate-to-progressive, common sense North Carolinian; a pragmatist; and always guided by a healthy dose of idealism tempered by reality. My philosophy evidences itself in my past achievements (above) and in that I continue to have bipartisan support. I’ve always strived for consensus or opportunities for a win-win result. I also know there is occasionally an issue where the right thing is to take a principled stand. To have served successfully in the legislature and as Insurance Commissioner, and to strike that balance such that we have some of the lowest insurance rates while one of the most stable insurance markets in the country, I must be doing quite a lot right, and that’s because of my philosophy and leadership style.

4. The Independent’s mission is to help build a just community in the Triangle. How would your election to office help further that goal?

I define a “just” community as a community where there is fairness and equality. If re-elected as our state Insurance Commissioner, my pledge to always seek fair and equitable insurance rates will help in furthering the goal of a just community. In my commitment to seeking affordable, accessible health insurance for everyone, we will also contribute toward building that just community we and The Independent seek. I tremble at what may happen to our consumers and working families in the Triangle if the next Insurance Commissioner is a puppet of the insurance industry or doesn’t understand the intricacies of the job. If voters choose me as their Commissioner, then consumers and working families and all persons seeking a just community will be in much better hands.

5. Identify a principled stand you might be willing to take if elected that you suspect might cost you some popularity points with voters.

It is likely in the area of coastal insurance. Experts for years have told us of the dangers of continuing to build closer and closer to the shoreline. Global climate change, rising ocean waters, and common shoreline erosion are all enemies of persons who choose to build closest to the ocean. Notwithstanding reasons to the contrary, there are still many who build the mega-size, multi-million dollar beach homes (often not their primary residence either) and, when there is a major storm, choose to re-build in the same location even though the public and/or private insurers help pay for the rebuilding.

To properly address concerns about coastal insurance carriers having appropriate reserves, whether rates on the coast actuarially reflect the true risk, and to increase public safety, I will continue my partnership with the first responders and engineers who promote stronger building codes on the coast, and promote protections from windborne debris. I will also promote necessary reforms in the current “Beach Plan”. In comparison to other southeastern coastal states, our insurance rates are still relatively low but the actions needed in order for us to keep insurance companies writing coverage on the coast – or even to bring them back to write on the coast because so many insurers have scaled back or left the coast — will not be popular with certain folks on the coast. Such action may likely be necessary for me to perform the balance required of me in the job of state Insurance Commissioner. This principled stand may not win me popularity points with voters who live within a few miles or so of the ocean, or the homebuilders who make money off them, but it is the right thing to do. It is a matter of public safety, as well as financial and actuarial responsibility.

6. How should North Carolina deal with insurance companies that engage in “policy linking,” requiring policy holders to have homeowners and auto insurance with the same company?

The practice of “linking” or “bundling” is presently lawful. It is a business decision made by some companies realizing that they need to balance the more profitable auto insurance coverage with the less profitable (sometimes unprofitable) homeowners’ insurance coverage. For some persons, “linking” saves them money. For others, it does not. In fact, it is getting to the point where “linking” creates unfair results for policyholders. Policyholders deserve a choice of having separate insurance carriers for different risks (one company for auto, another for their home) if it is in their best financial interests. I have already initiated an internal Department study on the subject, and plan on reporting to the legislature in 2013. Because legislators have joined me in inquiring about this subject, I anticipate one option is legislation to help curtail the practice.

7. How should NC regulate premiums charged to residents of the coastal counties? What is the best way to achieve fairness for residents and insurers in these hurricane-prone areas?

The first thing is to make sure North Carolina does not elect a state insurance commissioner tied to the insurance industry. (I’m the only candidate in this race who is independent from the insurance industry. I’ve never been employed by any insurance company.)

Second, I believe the best way to regulate the premiums is the way we are doing now: Requiring insurance companies to seek approval for rate increases or adjustments from the Department of Insurance, with oversight by the Insurance Commissioner, and requiring that insurance companies prove their case actuarially that such adjustments are needed in order to ensure more private insurance companies write on the coast and give folks options, instead of everyone going only to one company or by default only to the coastal property insurance wind pool (also known as “the Beach Plan.”) It is also important to keep in mind that for hurricane-prone areas the legislature has already implemented a formula for how rates are set. Because that formula or system is not perfect, I believe we should make necessary reforms in the 2013 legislative session – building on those reforms I successfully advocated for in the 2009 and 2012 sessions – to make it even fairer.

As stated previously, I’ve been steadily working on ways that meet the balancing act to address this: seeking stronger consumer protections, strengthening the Beach Plan by keeping larger reserves, promoting mitigation credits for homeowners fortifying their homes, and finding ways for any actuarially necessary rate adjustments to be done in a staggered or graduated way over time so homeowners are not all impacted in any one year with a large potential increase (as when my predecessor was in office) but may see no more than 10 percent or so in any given year, if that is in fact warranted at all. These approaches, collectively, will result in more insurance companies writing on the coast and, frankly, staying in North Carolina as a whole; fewer experiences of “sticker shock” when regular storms cause a rate impact; a smaller Beach Plan with greater reserves; and an even fairer process where homeowners’ insurance territories more directly reflect the risk.

Meanwhile, some persons promote having an appointed board – and not the insurance commissioner – set the rates. That would be a huge mistake because a board would become stacked by the insurance industry and/or populated by non-expert political hacks, and it would disrupt the consumer protection role of the publicly-elected, independent state insurance commissioner that we have presently.

To achieve fairness further for our coastal communities, we also need to use technology and compromise to better define “territories” so that someone who lives closest to a hurricane-prone area in a county should expect a higher rate than someone who lives farthest away from a hurricane-prone area in the same county.

8. Will you accept campaign contributions from donors employed by insurers and their PACs? Why or why not?

Before discussing the 2012 campaign, please consider that for my 2008 campaign I rejected campaign contributions above $200 from individuals employed by companies regulated by the Insurance Commissioner. Additionally, for the 2008 campaign my campaign and I rejected ALL campaign contributions from insurance industry PACs since the date that I filed for Insurance Commissioner in that cycle. The limitation to $200 or less was based on the pilot voluntary, public financing program in place for the 2008 election of Insurance Commissioner. I was the first Insurance Commissioner candidate to “opt in” to the public financing program. That was a drastic change from the usual Insurance Commissioner election campaign where candidates routinely seek contributions up to $4,000. As a publicly financed candidate, I refused ALL contributions between May 6, 2008 and Election Day 2008.

Sadly, legislative opponents of optional public financing for this office were elected to the majority in 2010. Those legislators starved the Voter-Owned Elections program since 2009, choosing not to appropriate funds for it. Those same legislators wanted to end the program completely but have planned on doing so after the 2012 elections.

Because of that action, there was not enough optional public funding available for insurance commissioner candidates to run a viable 2012 race for statewide office. (The candidates for State Auditor and Superintendent of Public Instruction had to take half of the money they’d normally receive from the program. Only two candidates were able to participate instead of six, and those two persons are running a hybrid campaign – using both public and private monies.)

To keep myself from unilaterally disarming and to raise enough funds to pay for expensive advertising statewide, I decided that the best way to combat the issue was to seek out many more individual donors not affiliated with the insurance industry as possible. To that end, my campaign has had many house parties, small events designed to encourage individual donors not affiliated with the insurance industry to help my fundraising efforts. I am pleased that the amount of contributions received from individual donors greatly outweighs any contributions I have received from insurance industry PACs. So, to the question posed, though my decision/option in 2012 was different than in 2008, I am a big fan of campaign finance reforms that promote a lesser interest in fundraising and a greater interest in ideas, integrity and relevant experience.

9. What’s your view of Blue Cross Blue Shield’s role as a nonprofit insurance company acting in the public interest? What action would you take to influence their policies?

Blue Cross Blue Shield of North Carolina (BCBS) has a history of serving the State, being an insurer of last resort and providing creative policy options for individuals, small-group and large group populations. Its non-profit status and its mission require it to work toward the public interest, unlike its competitors and for-profit companies. To that end, as state insurance commissioner I have worked to keep BCBS focused on its mission and to protect its legacy and also the consumers it serves. Sometimes my team and I are on a different side of an issue involving BCBS, and many times we are on the same side.

Consistent with my position while a State legislator and as state Insurance Commissioner, I will oppose conversion to a for-profit enterprise. During my legislative service I learned time and again about the founding of Blue Cross Blue Shield as a nonprofit insurance company and how the State gave the company special treatment in the tax laws, etc., as part of its commitment to the public interest.

As for your question about “action to influence their policies,” I intend to do the same with any insurance company or group that has either a direct or indirect relationship with the Department: That is, I will fervently maintain and build on an open line of communications so that my emphasis on consumer protection/competitive insurance markets/affordable health insurance is regularly shared with BCBS and will encourage BCBS to use that same line of personal communications to keep me apprised of its policies relevant to the Department of Insurance and my obligations as Insurance Commissioner. I will treat all companies and entities within the jurisdiction of Insurance Commissioner as equals under the law.

10. Given that this election represents the first turnover in Insurance Commissioner in 24 years, give your opinion of the current commissioner’s tenure, both kudos and criticisms.

NOTE: Indy Weekly advised me not to answer that question because it was included in error. This question applied to the 2008 election, not to the 2012 race.

11. As member of the Council of State, you would have input on the issue of the death penalty, including the execution protocol, which was taken up by the Council last year. Do you feel qualified to vote on such issues? If so, how would you vote on the execution protocol and other death penalty matters that may come before the Council? And is the Council of State an appropriate body to deliberate these issues?

As former Insurance Commissioner Jim Long’s Assistant Commissioner, I followed this matter very closely as it was considered by the Council of State between 2007-2008 and provided, as was my job, both advice and counsel on every facet of the subject to the best of my ability. His Council of State vote on this matter approximately 2007 is of public record. As an attorney, I have concerns about the Council of State considering any action on such an issue without the opportunity for all persons to present their position to the Council of State; that is, I have due process concerns. Even then, in my opinion, the issue of the execution protocol should fall instead within the penumbra of the Legislative Branch and the Judicial Branch. Until the statute is amended or stricken, though, and before voting on the execution protocol or any death penalty-related matters, I pledge this: I will remain very deliberate and cautious; do an ample amount of research; consider the matter before me with extreme care; and pray about it before making such a serious decision.

The issue has not arisen during my term as Insurance Commissioner.

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