Dale faces no-win decision

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May 2, 2006

By Sid Salter / syndicated columnist The Meridian Star Tue May 02, 2006, 10:23 PM CDT

JACKSON — State Insurance Commissioner George Dale has less than a month to make the toughest decision of his 30-year tenure in office.

Dale, the longest-serving insurance commissioner in the United States, could become the longest-serving statewide official in Mississippi’s history if he won re-election to a ninth term in office in 2007.

Folksy, popular and rarely drawing serious opposition during his eight terms in office, Dale was prior to Hurricane Katrina likely the “safest” statewide elected official.

Dale’s integrity and his dedication to making rural fire protection a statewide priority had made him bulletproof at the ballot box prior to Aug. 29, 2005, when Hurricane Katrina roared ashore.

Now, Dale must decide whether to approve a 397 percent flood insurance rate increase for Mississippi Gulf Coast residents living in high-risk houses — the so-called “wind pool” insureds. The Mississippi Windstorm Underwriting Association filed a request last week for rate hikes of 397.8 percent for homeowners, 268.3 percent for commercial buildings and 60.4 percent for mobile homes.

Insureds whose policies are in the “wind pool” are those in the flood insurance court of last resort in the six coastal counties. The policies cover those who live in flood-prone areas in danger of flooding from even a “small” hurricane.

The policies are sold by private insurance companies but administered by the state. The “wind pool” covers the potential losses through reinsurance policies.

Dale faces a choice that is political suicide either way he chooses.

If Dale approves the rates increases as requested, ratepayers in the six coastal counties will be swamped by increased insurance costs that are simply exorbitant. But if he protects Katrina victims from these massive rate increases, the insurance companies will raise rates for all insurance policies statewide to recoup their losses.

That means insureds in Corinth, Southaven or Greenville — and in all 82 counties of Mississippi — will be subsidizing the high cost of flood insurance for Gulf Coast residents. Florida residents are already paying higher insurance premiums statewide in just such a scenario.

The political fire storm from that is predictable. The Legislature will likely split along sectional lines, and it will be a political riot.

With the 2007 statewide elections approaching, few legislators would be safe from attack if insureds statewide are forced to pay higher rates because of the “wind pool” rate increases.

Dale won’t say which way he’s leaning, but it’s clear that approval of the full increase requested is unlikely. Hopes for federal or state money to help the wind pool for a year is a goal, but the prospects of such relief are at this point unclear.

The state’s insurance companies have been assessed to help pay the cost of wind-pool losses in Katrina’s wake. But with the cost of reinsurance in the post-Katrina era hovering near $50 million, the choices for funding sources get few and far between.

Dale might well be the most trustworthy statewide elected official to make this political decision.

A former Moss Point educator who lived through Hurricane Camille in 1969, he has both an understanding of and empathy for the problems of Coast residents.

After 30 years in office, Dale could make more money drawing his state retirement than he’s making as commissioner. Longevity records aside, Dale could lose his office and live with that choice.

But whatever choice Dale makes, it will greatly anger some or likely all of his constituents. There’s no “win-win” choice available.

Sid Salter of Forest is Perspective editor of The Clarion-Ledger. His e-mail address is

ssalter@clarionledger.com.

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