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Tennessee Commissioner applauds ICAE for
leading the way in insurer-regulator cooperation
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Nashville Exchange attendees receive a
warm welcome from Paula Flowers, commissioner of insurance,
Tennessee Department of Commerce and Insurance. |
For Paula Flowers, commissioner of insurance, Tennessee Department
of Commerce and Insurance, wearing different hats is all in a day’s
work. Not only does her office oversee insurance issues in the
Volunteer State, but she is also the state fire marshal, charged
with reducing fire damage and fatalities. Figuratively speaking,
she wore one more hat during her welcome address – that of
satirist and storyteller.
“Tennessee is without a doubt the most beautiful state in
the South,” she said. “But I bet you didn’t know
that ‘Tennessee’ is actually an old Cherokee word
for Land of Perpetual Road Construction.”
Flowers related the story of a Tennessee Commissioner of Transportation
who once set up a hot line for frustrated drivers to call and complain
about delays and detours. While it may have been a great idea,
the duty proved to be too much for a live operator to cope with,
so calls were eventually directed to a voice mailbox. Ironically,
call volume continued unaffected. Apparently, the catharsis of
being able to vent frustration at anyone – or anything – was
enough resolution for most frustrated motorists.
This approach to complaint resolution is clearly not the case
at the Tennessee Department of Commerce and Insurance. Describing
her operation as a totally ‘revitalized department,’ Flowers
drew a picture of a proactive staff well versed in working with
many different insurance carriers over a broad range of lines.
Indeed, the ability of staffers to assist consumers across a broad
range of insurance products is a prerequisite in the department.
“It’s easy for people to get segregated and siloed
to one line of insurance,” Flowers said. “But customers
buy many different kinds of insurance. We need to understand and
respond to the issues the customer is concerned about, no matter
what line of insurance we are talking about. We also need to realize
that we are in competition with the customer’s own expectations
about service and response, and those expectations are getting
higher all the time.”
Market conduct issues take center stage
Flowers reported that Tennessee used to be almost exclusively
focused on financial strength and security, not market conduct.
“That focus has changed somewhat under my watch,” she
said. “We are now much more concerned about market conduct
issues, not just the financial dimensions – which aligns
our focus more closely with the ICAE’s focus on market conduct.”
This market-conduct orientation is organized around one basic
principle – treating customers fairly and communicating with
them in ways that they can understand.
“Our belief is that a large number of complaints can be
avoided with better communication and education by the companies,” Flowers
said. “I have frankly been stunned at some of the communications
that have been shared with our department by consumers from around
the state. Many of them are as condescending as they are unclear.
“We understand that you can’t satisfy everyone all
the time,” she said. “But the lack of consumer education
affects relations between customers and companies.” Still,
we understand that not all people are going to be happy all the
time. As regulators, we understand this principle and we trust
that you will do your best on behalf of your customers.”
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Flowers jokes with attendees with, “I
bet you didn’t know that ‘Tennessee’ is
actually an old Cherokee word for Land of Perpetual Road
Construction.” |
Education counts
According to Flowers, the Internet has done a great deal to educate
consumers about insurance, but not always in positive directions.
“The Internet can be a problem for all of us,” Flowers
said. “Customers use it all the time to try to understand
insurance, but that understanding is superficial and often wrong.”
Add the fact that many consumers usually ignore or forget most
of what they learn and the potential for problems can spring up
in even the unlikeliest areas.
“At roughly the time I took over the department, three risk
retention groups had just gone under,” Flowers said. “One
of them was a legal risk retention group serving 5700 lawyers.
Pretty soon they all started calling asking why they had no recourse
with regard to coverage now that the risk retention group had failed.
Clearly, they had not read the bold type in their contracts that
stated risk retention groups are not insurance and that they do
not qualify for the state guaranty fund. So if lawyers don’t
understand what they are buying, it should be no surprise that
the average consumer does not understand either.”
Flowers agreed that the ICAE is a textbook positive example of
a proactive effort by the industry.
“As regulators, we need to be more involved and work more
closely with companies,” she said. “We all need to
be more proactive. I applaud your group and the effort you are
making in this area and I wish you success. To make the organization
even more proactive, my only suggestion would be to have a regulator
serve on the Executive Board of the ICAE.”
CONTACT INFO
Paula Flowers
Tennessee Department of Commerce & Insurance
615.741.5541
Email: paula.flowers@state.tn.us
www.state.tn.us/commerce
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