1991-1992
Jim
Brown was elected Louisiana's Commissioner of Insurance with
nearly 60 percent of the vote. At that time, the insurance
industry in Louisiana was in utter chaos. Citing a crisis
situation, Brown was sworn in as Commissioner a month early,
on December 4, 1991.
Before
his swearing in, Brown said, "I had initially planned
to take office along with the other state elected officials
in January. However, because of the continuing insurance crisis,
especially in regards to the growing insolvency problem, I
feel that I must address these issues immediately and put
the Department on the proper course. If we're going to get
this mess under control, we're going to have to do it right.
And most of the things we are going to do aren't going to
be big surprises. I presented a 70-page plan of restructure
and reform to the voters. Since the voters elected me based
greatly on the strength of that proposal, I think it would
be improper for me not to make every effort to put that plan
into action as soon as possible."
Less
than one week after taking office, Brown asked the Joint Legislative
Budge Committee for funding to allow the Department to hire
85 additional employees in an effort to better enforce the
regulation of the insurance industry. Brown said the Department
needed more attorneys, certified financial examiners and investigators.
A few days later the Department received approval for $2 million
to begin the reform measures implemented by Commissioner Brown.
Brown
had the challenge of building an Insurance Department virtually
from scratch. And that's just what he did. In February 1992,
Commissioner Brown launched a national tour of major insurance
companies to inform executives that stronger regulation of
the industry would make Louisiana a sound, stable environment
for conducting insurance business. In March of that year,
Brown ordered a team of Insurance Department examiners to
audit all Louisiana-based insurance companies. This was the
first time such intense scrutiny had been undertaken in the
Louisiana Department of Insurance.
Commissioner
Brown unveiled his plans for creating an anti-fraud unit within
the Department of Insurance.
In
July 1992, Commissioner Brown named the appointments to the
Louisiana Health Care Commission. Brown formed the panel to
draft legislation aimed at dealing with the problem of the
affordability and availability of health care.
In
August 1992, Hurricane Andrew struck Louisiana with great
force. Commissioner Brown dispatched Insurance Department
personnel to five emergency relief centers in south Louisiana,
where the damage occurred, to help expedite insurance claims
by working with storm victims and insurance company representatives.
Commissioner
Brown sponsored the first Louisiana Health Care Conference
September 24-26, 1992. More than 300 health care and insurance
industry executives and Louisiana Department of Insurance
employees attended the meeting, which was aimed at gathering
information to draft proposed reform measures for the 1993
session of the Louisiana Legislature.
In
his first year in office, Brown took regulatory action against
companies 30 times and shut down 10 insurance companies.
1993
In March, Commissioner Brown unveiled a health care plan designed
to bring affordable primary health care coverage to more than
half of the state's one million uninsured citizens. The plan
was part of a complete health care reform package developed
by the Louisiana Health Care Commission.
That
same month, Brown proposed a plan approved by the Louisiana
Insurance Rating Commission that expanded the availability
of property insurance in the FAIR and Coastal Plans. Originally
the Plans offered only basic coverage, or the current cash
value of the property. The changes included adding coverage
for vandalism, malicious mischief and windstorm damage. Commissioner
Brown wanted to expand the availability of property insurance
in light of the curtailment of such coverage by insurers that
sustained heavy losses due to Hurricane Andrew.
In
April, more than 70 bills were filed with the Louisiana Legislature
as part of Brown's legislative package. These bills were designed
to bring affordable health care to Louisiana's citizens, and
to chip away at some of the root causes of the high cost insurance
due to the large number of drunk drivers in the state.
In
June of that year, Commissioner Brown launched SHIIP, the
Senior Health Insurance Information Program. Brown created
the program to help senior citizens make more educated decisions
concerning Medicare and health insurance.
Also
in June, 17 bills in Commissioner Brown's health care reform
package were signed into law, including measures allowing
policyholders to change insurers without being barred from
coverage by pre-existing illness, and another measure that
created a basic health care plan for the working poor.
In
December, the National Association of Insurance Commissioners
(NAIC) announced that the Louisiana Department of Insurance
had won accreditation after two years of intensive work. Commissioner
Brown's reorganization of the Department included strengthening
the Office of Financial Solvency, creating the Department'
first Insurance Fraud Division, and rewriting the Insurance
Code to strengthen provisions dealing insurance company insolvency.
Commissioner
Brown's efforts proved to be the most dramatic turnaround
of any public agency in Louisiana's history. In just two short
years, Brown had completely restructured the Louisiana Department
of Insurance. He made numerous criminal referrals of insurance
fraud to federal and state prosecutors that led to scores
of convictions, and he filed lawsuits worldwide against insurance
swindlers that defrauded the public.
During
Brown's first two years as Insurance Commissioner, the Department
also auctioned off the assets of failed insurance companies.
The more than $1 million collected from these auctions went
to pay off the claims and obligations of insolvent insurers
whose assets were seized by the Department.
For
the first time in years, Louisiana was experiencing a stable
insurance climate. And newspaper editors across the state
praised Commissioner Brown's success:
Lake
Charles American Press, January, 1993
"Jim didn't rebuild the Department, he built the Department,"
said Tom Oglesby, Independent Insurance Agents of Louisiana
executive vice president.
"Michael
Manes, an LSU instructor and head of Citizens Auto Reform
gives Brown an A++ when grading him in comparison with other
administrations."
The
Shreveport Times, June, 1993
"Meanwhile current Insurance Commissioner Jim Brown should
be strongly commended for transforming one of Louisiana's
most corrupt agencies into a hard working agency dedicated
to protecting people - not picking their pockets. Commissioner
Brown, thankfully, is replacing the office's colorful appeal
with the public's trust."
Madison
Journal, Tallulah, La., August, 1993
"The office which he (Jim Brown) took over was in shambles.
Brown has worked diligently to bring stability to the insurance
industry in Louisiana. He has cleaned house and the people
of the insurance industry are complimentary of his performance."
The
New Star, Monroe, La., December, 1993
"What Commissioner Brown has done there, considering
the reputation of the Department, has been amazing,"
said NAIC President David Walsh, Alaska's chief insurance
regulator.
1994
Commissioner Brown began his third full year in office by
conducting a series of town meetings to explore the various
national health care reform proposals being debated and what
they meant for Louisiana's citizens.
For
the first time in the Department's history, financial solvency
standards were being enforced. In February, the Louisiana
Department of Insurance announced it had levied $397,000 in
fines against insurance companies delinquent in filing regulatory
financial information. By holding 50 hearings a day during
a three-week period, the Department was able to collect 100%
of the fines imposed.
That
same month, the Department announced that the roadblocks of
1993 which allowed Brown and Louisiana State Troopers to begin
enforcing mandatory auto insurance coverage on the estimated
40% of uninsured motorists in the state resulted in the collection
of $6.8 million in reinstatement fees.
On February 17, Commissioner Brown announced that $635,250
had been collected in fines imposed on insurance companies
and agents over the past 19 months by the Louisiana Department
of Insurance.
Later
that year, Commissioner Brown was featured in Best's Review
insurance publication for his efforts to stamp out insurance
fraud. The magazine noted, "The results since Brown took
office in December 1991 are impressive: Thirty-two executives
of insurance companies have been convicted of various white
collar crimes, which are usually difficult if not impossible
to investigate and prosecute."
Denham
Springs-Livingston Parish News, June, 1994
"He's (Jim Brown) generally considered to have done an
outstanding job of walking into a very messy situation and
cleaning it up very quickly and efficiently."
1995
Commissioner Brown hosted a conference on health care reform
on March 8 that included a program of leading health care
professionals.
In
April, Brown urged the Legislature to pass a stiffer seat
belt law in Louisiana. The measure was signed into law that
year.
Also
in April, Commissioner Brown announced that the number of
companies writing workers' compensation insurance in Louisiana
had risen from one to 97 since he took office in 1991.
In
May, in response to recent flooding in south Louisiana, Brown
dispatched Department of Insurance employees to New Orleans
to help coordinate insurance-related flood relief services
in cooperation with the City of New Orleans.
In
response to an examination of questionable claims payment
practices performed by the Louisiana Department of Insurance,
Blue Cross and Blue Shield was ordered to refund $21 million
to Louisiana policyholders. The matter was settled in June.
In
August, the sale of 250 pieces of real estate, among the assets
of an insolvent insurance company, brought in over $500,000
by the Louisiana Department of Insurance. The money was used
to help pay claims and other obligations owed to consumers
by the financially troubled company.
Commissioner
Brown was re-elected to a second term with 60 percent of the
vote on October 21, 1995. As of that date, the Department,
under Brown's tenure, had shut down 21 failing insurance companies
and made more than 160 referrals that led to indictments of
individuals involved in troubled insurance companies.
In
December, the Louisiana Department of Insurance was granted
reaccreditation by the NAIC.
1996
In early January the Commissioner announced new rules and
a new law regarding viatical settlements. The measure was
part of Brown's 1995 legislative package and was designed
to protect terminally ill patients who opted to receive life
insurance benefits before their death.
In
February, the Department announced that in 1995 it had collected
nearly $624,000 from delinquent bail bond companies whose
clients jumped bond.
Also
that month, Brown noted that the insurance industry was granted
approval to reduce workers' compensation insurance rates by
11.6%, which meant a savings of million of dollars for employers
and added incentives for hiring.
In
June, Commissioner Brown announced that at his request, Governor
Foster had signed an executive order creating a task force
designed to study insurance rates and to make recommendations
to the 1997 session of the Louisiana Legislature. In 1997,
this panel garnered legislative approval and became known
as CAIRE, the Council on Automobile Insurance Rates and Enforcement.
Commissioner
Brown traveled to Washington, D.C. in July to meet with President
Clinton to discuss the Senate's Catastrophic Disaster bill.
On the trip, Brown also met with the Comptroller of the Currency
to discuss joint guidelines for regulating banks selling insurance.
In
August, Brown and Governor Foster hosted a major summit to
discuss the continuing efforts to halt church burnings throughout
Louisiana.
In
September, the Louisiana Insurance Rating Commission, with
Brown's direction, voted to require insurance companies to
factor in new laws in pending and future requests for rate
increases.
Prudential
Insurance Company of American was fined $550,000 in November
to reimburse victims of misleading sales practices.
1997
Commissioner Brown announced a January 28 health insurance
conference would take place to address recent changes in federal
health care laws.
In
March, Brown released a legislative plan that proposed the
most significant crackdown on drunk drivers and uninsured
motorists in Louisiana since driver's licenses were first
required in 1946.
In
June, Brown announced that the major bills in his reform package
had been passed by the Legislature. Those measures passed
included: raising the driving age, limiting the availability
of uninsured motorists to recover losses from other drivers,
the seizure of vehicles from multiple drunken driving offenders,
lowering the blood alcohol content for DWI, and the impoundment
of uninsured vehicles.
In
August, the law creating CAIRE went into effect. The panel
is formed as a watchdog group comprised of 16 members to monitor
and report on the enforcement of auto insurance laws around
the state.
In
September, Brown announced that rates for workers' compensation
insurance had dropped 25 percent over the past two years.
Brown attributed the downward trend to antifraud and workplace
safety measures.
1998
In January, Commissioner Brown announced an initiative to
determine if there were any uncollected insurance claims due
to Holocaust victims or their heirs in the state.
In
February, Brown announced that more than $1.7 million in fines
and penalties was collected by the Louisiana Department of
Insurance in 1997.
A
few days later, Brown announced a new proposal to extend health
care coverage to 100,000 Louisiana children through initiating
a federally funded program in the Department of Insurance.
In
March, Brown announced that a Louisiana Department of Insurance
fraud investigator was honored with the 1997 Fraud Fighter
of the Year Award given by CNA Insurance Companies.
Commissioner
Brown announced in May an estimated $48 million consumer savings
due to an auto rate reduction.
In
June, Brown announced a second massive auto insurance rate
reduction due to the state's new "no pay, no play"
law, amounting to a $73 million savings to policyholders of
almost 300 insurance companies.
Brown
said in July that 188 insurance companies faced $1 million
in fines for failing to comply with the state's auto insurance
rate rollback reforms.
In
August, Commissioner Brown's Fourth Annual Health Care Conference
concentrated on trends and new developments in the insurance
industry.
Also
in August, following the connection of a new telephone system,
Commissioner Brown announced that the Department handled more
than 790,000 incoming consumer related telephone calls in
the 18 months since the system was launched. The new phone
system made a precise count of all incoming calls.
In
October, Commissioner Brown dispatched Department workers
to handle complaints and offer advice to victims of Hurricane
Georges.
A
new public awareness campaign targeting aggressive drivers
on Louisiana highways was kicked off in December.
Also
in December, the Department was reaccredited by the NAIC.
1999
In January, Brown announced that farmers would receive rate
reductions and added crop insurance coverage.
In
July, State Farm was granted a $15 million rate decrease by
the Louisiana Insurance Rating Commission.
Commissioner
Brown's Fifth Annual Health Care Conference was held in August
to discuss laws passed in the Legislative session.
Also
in August, Commissioner Brown announced that the Department
of Insurance returned $2.35 million in unused funds to the
state that were budgeted for the last fiscal year. The Department
operates entirely on self-generated funds.
In
1999, the Commissioner was indicted just two weeks before
the primary election but won a solid victory with nearly 58
percent of the vote in November. In that election, Commissioner
Brown was endorsed by 43 newspapers across the state.
People
who know Brown or know his reputation, including members of
the press, know the charges against him are "politically
motivated hooey." (Shreveport Journal, October 15, 1999)
2000
Commissioner Brown is sworn in for a third term in January.
In
the first two months of the year, the Commissioner's crackdown
on fraud continued with the arrest of two insurance agents
accused of fraudulent insurance activities.
In
an effort to raise awareness about the state's headlight law,
Commissioner Brown partnered with numerous law enforcement
agencies across the state in February to promote the new safety
campaign.
By
May, three more insurance agents were booked for alleged fraudulent
activities.
Commissioner
Brown also announced in May that Allstate Insurance Company
lifted its freeze on issuing new homeowners insurance policies
in Louisiana.
In
June, Brown announced that State Farm would rebate $31.5 million
to auto policyholders in Louisiana. A few days later, a $19.5
million rate rollback was announced by State Farm. Commissioner
Brown cited measures he implemented, such as "no pay,
no play", impoundment and a crackdown on drunk drivers
as one of the reasons for the lower auto insurance rates.
Commissioner
Brown designated August as Senior Citizen Health Coverage
Awareness Month. Governor Foster issued a proclamation at
Brown's request. The Commissioner and his staff took time
during the month to explain health insurance options to senior
citizens throughout the state.
Also
in August, the Washington-based Consumer Federation of America
gave Louisiana an A+ rating for being adequately funded to
protect consumer around the state. The study by the CFA compared
ten years of insurance regulation, from 1988-1998, for all
states and came up with the following comparisons for the
Louisiana Department of Insurance:
1988 1993 1998
Total Staff 153 224 275
Actuarial Staff 0 3 4
Market Conduct Exams 1 4 56
Complaints 16,560 3,963 4,537
Department Budget (millions) $4.2 $15.4 $25.2
Domestic Insurers 15 180 167
Total Insurers 345 1728 1703
In
September, Commissioner Brown urged insurance companies not
to raise rates or cancel policies if a consumer had an accident
as the result of defective Firestone tires.
