[StBernard] Jindal's stance alarms insurance industry

[Westley Annis]

John Maginnis
 
When he is not making speeches and holding fund-raisers around the state,
back at his day job, Congressman Bobby Jindal is pushing ahead on an issue
of vital importance to Louisiana as well as his gubernatorial ambition. 
 
That issue is not public health care, which propelled him from boy-genius
status to the top levels of state government and then politics. He has
forsworn second-guessing the governor and the Legislature while they grapple
with the monumental challenge of overhauling the health-care system in the
coming months. During Jindal's health-care blackout, his tag-team partner,
U.S. Sen. David Vitter, has stepped up to do the second-guessing. 
 
In the meantime, Jindal has latched onto an even hotter new cause, taking on
insurance companies, and it's causing heartburn and alarm among his friends
and contributors in the industry. 
 
Business-friendly Jindal has signed onto to what is considered one of the
most hostile-to-business bills of the new Congress, an effort to strip the
insurance industry of its anti-trust exemption. Insurance firms are allowed
to exchange information on loss experience in order to figure their rates
independently. But Jindal thinks some companies could be abusing the
exemption so as to fix prices and deny coverage.
 
The national insurance industry is mobilizing to oppose the repeal effort,
which one lobbyist calls "the big one." 
 
Jindal's co-sponsorship has rattled industry representatives in Louisiana.
"We were very surprised," said one executive who wants to remain anonymous.
"It is out of character with Jindal." 
 
They fear he has fallen under the influence of the combative Mississippi
lawmakers who are pushing companion House and Senate bills: Congressman Gene
Taylor, a Democrat, and Sen. Trent Lott, the Republican whip. Both lost
their houses to Katrina and, according to one lobbyist, are waging "a
personal jihad" against the insurance industry. 
 
A number of Democrats have signed onto the bill, including Sen. Mary
Landrieu. But it's the populist rhetoric of Republicans like Jindal that
jars the companies the most. Like when he told a congressional committee
last week, "It does not seem right that insurance companies are making
record profits while Louisiana residents cannot afford their premiums." 
 
Now it doesn't take a child prodigy to figure the political angle of the
congressman and gubernatorial candidate, who represents many who were
victimized once by the hurricane and -- some claim -- again by their
insurers. He will need an answer when asked whose side is he on. 
 
Insurance executives, after a stiff drink or two, might find ironic humor in
the juxtaposition of Democratic Gov. Kathleen Blanco cajoling companies to
come do business in the state while Republican Jindal threatens to bring
down the federal hammer. 
 
Jindal insists his bill is consistent with his free-markets philosophy. "We
are all for a functioning marketplace, but we don't have that today," he
said. "If we don't fix it, it will get worse." 
 
Despite the horror stories of policyholders, industry representatives deny
companies collude to fix rates. Rather, they say they only share statistical
information through clearinghouses in order to properly assess risks. 
 
Jindal has said he is open to amending the legislation to allow for
legitimate data sharing, which would settle much of the industry's qualms.
Yet would such a sanitized bill do much of anything to fix the problems of
affordability and availability? 
 
Another Jindal bill, though not as sexy and still on the back burner, could
do more real good. Simply, it would add optional wind coverage to the
federal flood insurance program. Policies backed by the U.S. Treasury would
be far preferable to having the state-backed insurer of last resort,
Citizens, assume all that risk. 
 
Better yet, suggests Insurance Commissioner Jim Donelon, expand the current
Terrorism Reinsurance Act to cover all perils, including hurricanes and
earthquakes. If the federal government stepped in to cover catastrophic
losses above a certain level, it would stabilize high-risk insurance markets
like the Gulf Coast. 
 
That's the better course for Jindal, one that finds solutions instead of
scapegoats. His nervous friends in the industry hope he comes around to that
soon, or that he gets back to health care before doing them real harm.