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Proposal to elect insurance commissioner faces ‘uphill battle’

Sen. Virgil Smith

Sen. Virgil Smith

By Justine McGuire
Capital News Service

LANSING — If Michigan had an elected insurance commissioner rather than one appointed by the governor, consumers would benefit from more favorable policies and insurance rates, Sen. Virgil Smith, D-Detroit, said.

Smith proposed a constitutional amendment to elect the insurance commissioner and said his research found that states that elect their commissioners tend to have “more progressive laws on the books.”

They are California, Kansas, Delaware, Georgia, Louisiana, Mississippi, Montana, North Carolina, North Dakota, Washington and Oklahoma.

Smith pointed out that they’re not all-blue or all-red states politically.

The constitution and current law require most cabinet department heads to be appointed by the governor or a state commission. Only the secretary of state and attorney general are elected.

Gov. Rick Snyder created the Department of Insurance and Financial Services in January. Part of its role is to regulate the insurance industry and protect consumers.

Kevin Clinton was appointed to head the department and had served as insurance commissioner since 2011.

“Insurance and financial service businesses are a vital part of the overall economic health of Michigan,” Snyder said when he set up the department. He said it “will also go a long way toward creating and enforcing appropriate regulations, so we have robust consumer protections in place.”

Ken Silfven, Snyder’s deputy press secretary, said it’s not necessary to elect the commissioner.

“Michigan’s system has plenty of accountability because the director reports to the governor, who is elected by the people,” he said. “It’s a system that works well for consumers and job providers, and we’ve seen no compelling case for change.”

However, Smith said electing the insurance commissioner would benefit consumers since the position would be directly accountable to the public rather than the governor.

Smith predicted an “uphill battle” to make the change, however.

“I don’t think the industry will like it – they will fight this tooth and nail,” he said.

The Insurance Institute of Michigan said allowing the governor to appoint department heads makes a more cohesive executive branch.

“This allows each governor, who has been elected by the voters, to appoint and build a team of department directors that are supportive of his or her administrative priorities,” said Pete Kuhnmuench, director of the institute. “We do not see any evidence of a need to change this structure.”

Passage of a constitutional amendment requires a two-thirds majority vote in the Senate and House, followed by a majority approval of voters in a statewide election.

The proposal is cosponsored by Sen. Hoon-Yung Hopgood, D-Taylor.

Smith said he’s been working on the issue since 2007 when he headed the House Insurance Committee.

He said the next step is convincing the Senate Insurance Committee to give the proposal a hearing. Smith is the minority vice chair of the committee, which is chaired by Sen. Joe Hune, R-Hamburg.

Hune said of Smith, “He’s my best friend in the Senate.” But, Hune added that he doesn’t plan on giving the proposal a hearing because there’s not a lot of support for it.

And, he said, “I don’t think I support the issue.”

He said Smith is right about an “uphill battle.”

“I’m satisfied, even enamored, with the job Clinton is doing,” he said.

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