North Carolina has never had a Republican insurance commissioner, but three candidates running in the GOP primary hope to change that — citing consumer welfare rather than their own ambitions as a reason for campaigning.
The primary is a three-way race between state Department of Transportation Adopt-A-Highway coordinator Mike Causey, Charlotte general contractor Ronald Pierce, and Onslow County insurance agency owner Joe McLaughlin.
In separate phone interviews, Causey, Pierce, and McLaughlin stress they want to wrest the office away from incumbent Democratic Commissioner Wayne Goodwin in order to make the Department of Insurance friendlier to the needs of North Carolina consumers by integrating free-market principles in the insurance industry.
“As hard as we’ve tried over the years, Republicans have never been able to crack this office,” said Causey, who ran against Goodwin in the 2012 election and garnered more than 2 million votes.
Causey also ran in 2014 for the 6th Congressional District seat formerly held by the late Rep. Howard Coble, but came in seventh of nine GOP primary candidates.
Causey wants the state insurance industry to operate under more free market principles, which would encourage more insurance companies to do business in North Carolina, thus creating new jobs, and helping the state and local economy.
An insurance industry based more on market principles would give consumers more choice, which is sorely lacking now, Causey said.
“Consumers are smart enough to know what kind of policies they want,” Causey said.
Causey cites Obamacare as an example of government distorting the marketplace.
“I have always opposed the federal takeover of health care,” Causey said. “You can’t have the federal government dictating to the insurance companies what they can charge. The insurance commissioner has flipped-flopped. He’s always welcomed Obamacare, but now he admits it’s disruptive to our insurance market,” Causey added, referring to Goodwin’s recent letter to U.S. Health and Human Services Secretary Sylvia Burwell warning that the Affordable Care Act has destabilized the state’s insurance market.
North Carolina’s Rate Bureau, which allows private insurers to set their rates collectively, also runs counter to free-market principles, Causey said.
“Over the years the Rate Bureau has sort of become like a country under Communist rule,” Causey said. “We need the legislature to address that, and I believe they will.”
That said, Causey believes to abolish the Rate Bureau would further destabilize the insurance market, so he calls for an “opt-out.”
On the other hand, Pierce would abolish the Rate Bureau outright.
“It would be gone,” Pierce told Carolina Journal.
Pierce agrees that free-market principles should dictate the insurance market in North Carolina, but the bigger issue for him is the industry’s coziness with the department that is supposed to be regulating it.
“If you look on the Department of Insurance website it says it’s there to regulate the insurance industry. Well that ain’t happening,” Pierce said. “Quite frankly, the insurance companies are ruling the roost.”
The problem, Pierce said, is the department and the industry serve as a revolving door for executives, who use private information on consumers gained from their time in the department to use against consumers when they return to work for an insurance company.
“This is one of the things I’m going to stop,” Pierce said. If elected, he would reduce the number of deputy commissioners, and deputy commissioners would not be allowed to go back to an insurance company for a period of two years if they came to the department from an insurance company.
Another issue Pierce would tackle is Blue Cross and Blue Shield of North Carolina’s nonprofit status — by abolishing it.
But Pierce’s main goal is making the Insurance Department more consumer friendly. His experience as a general contractor dealing with insurance claims is what inspired him to make the run for insurance commissioner.
“I’m not running for office just to run for office,” he said. “My agenda is pretty simple. I’m running for office for the people of North Carolina, not the insurance companies. I have heard every lie possible from the insurance companies about why they can’t pay.”
Although McLaughlin has previous political experience as a member of the Onslow County Board of Commissioners, he believes “insurance is too important to leave to professional politicians, much less progressive liberal politicians like the one we have now.”
During his career as an army officer, licensed insurance agent and certified financial planner, McLaughlin not only spent countless hours involved in “tabletop insurance discussions” but also has the experience of being involved in the public arena and solving public policy problems.
McLaughlin described Goodwin’s letter to the Health and Human Services department as an “election year band aid to cover his previous unflinching support for Obamacare.”
McLaughlin said he’s not worried about BCBSNC pulling out of North Carolina because it has a significant share of the market.
Such concentration, he said, is not a good thing.
“We have to make more companies want to participate in this business,” McLaughlin said.
By the same token, McLaughlin said it’s not surprising that insurance companies are experiencing real problems in the wake of Obamacare. Repeal is the answer, and although Obamacare is a federal law, state insurance commissioners are not without lobbying influence with their congressional delegations, he said.
As for the state’s Rate Bureau, McLaughlin said “the last organization that was big on bureaus was the Soviet Union, and how did that work out for them?”
As for North Carolina being the only state with a Rate Bureau, McLaughlin said that “when you’re the outlier, you’re either really, really good or you have a problem.”
McLaughlin believes it’s time for a fundamental review of the Rate Bureau, after which it’s “tweaked or abolished,” he said.
“I hear anecdotally from insurance companies that they want to offer a product but they can’t get it through the Rate Bureau, which stifles free market principles,” McLaughlin said. He specifically cited some insurance companies’ desire to lower automobile insurance rates for soldiers deployed overseas.
McLaughlin said the insurance industry will work better for everyone — company and consumer — with a return to basic conservative principles.
“Open market competition. Rewarding the risk takers. Incentivizing competition. Giving the people choice” are the path to improvement, he said.