Workers expect their defined contribution plans to play a greater role in their retirement income than annuities.
July 12--Five candidates for Kansas insurance commissioner are fighting for the Republican nomination, but they all agree: Get more insurance companies to come to Kansas and compete for business, and Kansans will get cheaper and fairer coverage.
The state insurance department needs to regulate the industry in a way that creates a healthy, competitive business environment, they said. Companies in competition will lower prices, offer specialized products and keep their promises in order to avoid losing customers. The market as it is now, candidates said, is not healthy enough.
"If there's something they agree on across the board, it's trying to increase competition," said Rep. Scott Schwab, R-Olathe, who is chair of the House's insurance committee. "If you have more options, it becomes a price war, which is best for consumers. The difference is how each candidate would get there."
The office of insurance commissioner regulates insurance companies, educates Kansans about insurance policies and investigates claims against insurance providers. The GOP candidates and Democrat Dennis Anderson are vying for the office, left vacant by three-term incumbent Sandy Praeger, who won her first term in 2002.
Anderson co-owns a family business that trains insurance agents for the state licensing exam. Though he would like to see more insurance employers in the state, he said the overall insurance climate is a good one to do business in.
"The health of the industry is good," he said. "There is an opportunity to attract more employers, administrative offices and jobs to the state, but insurance is a complex enough product that it has to be regulated.
"The first thing that has to be addressed is whether companies are holding up their promises to Kansans."
Praeger said the Republican party has become more politically conservative since she took office.
"Our most important responsibility is to protect consumers," she said. "The overarching question we ought to be asking is should the insurance department continue to be a department that does what is best for Kansans or should it become political?"
David Powell, an El Dorado insurance agent, ran against and lost to Praeger in 2002 and 2010. When former insurance commissioner Kathleen Sebelius took office, she drove out companies under the name of "consumer protection," he said. He said he think statutes that ban insurance companies who left Kansas from coming back for five years need to be modified because those companies could develop products consumers want in that time.
Powell said he is an advocate of the free market and state regulation of health care, and regulators step in when a company tries to find loopholes to avoid paying insurance claims.
"If companies aren't earning the right to do business with somebody, then they can go somewhere else," he said. "The free market is better gauge to run health care than the federal government."
Ken Selzer, a Leawood accountant and insurance executive, said he will advocate for a balanced regulatory environment that encourages more companies to do business in Kansas, and examine tax levels and coverage mandates. Right now, the department is not responsive enough to the industry and forces too many coverage mandates, he said.
"Over the past 20 years we've had fewer and fewer companies doing business in Kansas," Selzer said. "We're going to find a balance that protects consumers but encourages businesses to want to operate here.
"Companies simply want a predictable regulatory environment to grow their business in, and that will result in benefits for the consumer."
State senator and insurance committee chairman Clark Shultz said that when Kansans buy insurance they want to buy it from a company that is healthy, is properly run and has money to pay for claims. They also want the department to support them if they have problems with any insurance provider, he said.
"We don't want to chase healthy insurance companies out of the state," he said. "We want to attract them.
"For the most part, companies want to follow the law. They want to make sure they know what the laws are, and we can help them meet those regulations. It's not just about an auditor putting down the hammer or letting companies do what they want to do. It's about helping companies come in and do what they're supposed to do."
Shultz said the department should continue using incentives like deferment on taxes and more investment flexibility for healthy companies with good track records.
"If I can get 10 more companies here, you'll get better prices and more selection of what you want," he said.
Beverly Gossage directs a consulting firm for insurance businesses. Gossage said Kansas has a cumbersome regulatory process that discourages insurance companies from offering products. She said states could work together to take less time reviewing insurance products.
"I'll remove barriers keeping business out," she said. "The greater the competition, the lower the premium rates. I'd like to see the free market do what it does best: put consumers in charge.
"We already have private exchanges, which are just independent agents who can sit down with any client, show them hundreds of diverse plans and have them choose the one they need."
Gossage said Kansans would even be better off without employer-sponsored health insurance.
"I like the idea of people choosing private policies," she said. "Those who buy individual, private policies take better care of themselves, pick plans with higher deductibles and lower premiums, and had much lower rates based on risk of claims."
Former state representative John Toplikar said that, in general, competition is the best way to lower costs.
"Usually the marketplace takes care of itself," he said. "We have a good framework right now. We just need to keep improving. There can always be better means of doing things."
Toplikar also said he is the only candidate in the race not affiliated with any insurance company, group or association, giving him an impartial viewpoint and ensuring fair oversight. He said his knowledge comes from 10 years of reviewing and passing reforms to insurance laws while he was a member of the House appropriations committee.
"Anyone who is a legislator, especially in leadership and appropriations committee, has dealt with line-by-line items of the Kansas insurance industry and budget department," Toplikar said.
Praeger and Schwab said that a working knowledge of the insurance business is necessary for the position.
"That's like saying you don't want a doctor to be surgeon general," Schwab said. "Well, I don't want someone who doesn't understand insurance."
Reach Nassim Benchaabane at 316-268-6514 or firstname.lastname@example.org. Follow him on Twitter at @NassimBnchabane
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