When Ralph Hudgens was chairman of the Senate Insurance Committee, he learned a lot about the business by going to industry conventions and meetings, getting an education from the pros about what kind of legislation and regulation was needed.
Hudgens said he “fell in love” with the business, and the industry reciprocated. When he decided to run for insurance commissioner in 2010, many in the industry were behind him.
“You had insurance agents all over this state and they knew who I was and what I believed,” Hudgens said. “So when somebody would ask who they should vote for in this crowd of candidates … the agents said, ‘I know Ralph Hudgens and I think he’d do a good job.’ ”
They did more than give him the thumbs up to friends. An Atlanta Journal-Constitution review of campaign records shows insurers and others in businesses directly or indirectly regulated by the commissioners’ office played a major role in bankrolling his campaigns over the years.
Capitol veterans know that insurers play a big role in statehouse politics because their industry is regulated by the state. Many legislators sell insurance for a living, and insurance companies, agents and lobbyists promote changes to state laws and help fund political campaigns, including the insurance commissioner’s. Georgia is one of only 11 states that elect their insurance regulator, according to the National Association of Insurance Commissioners.
That means those being regulated pump a lot of money into the political system.
Tim Ryles didn’t win friends in the industry after he won election as Georgia insurance commissioner in 1990 promising to freeze auto insurance rates. So some insurers helped a relative unknown, John Oxendine, oust him in 1994. Oxendine was criticized for leaning heavily on the insurance and small loan industries for contributions to help stay in office, and he went back to them in 2009-2010 when he ran unsuccessfully for governor.
Hudgens was the choice of many industry insiders to replace Oxendine. His campaigns have replicated his predecessor’s winning strategy. About two-thirds of the $2.1 million he raised to run for insurance commissioner in 2010 and for re-election last year came from people who work directly or indirectly — such as insurance industry lawyers or lobbyists — in industries that Hudgens’ office regulates or licenses.
For example, on June 10 of last year, when Hudgens was running for re-election, 24 State Farm executives, agents and staffers contributed more than $13,000 to Hudgens’ re-election campaign as the commissioner prepared to cruise to another term.
State Farm filed for a rate hike two days after Hudgens’ campaign got the checks, records show. Two State Farm companies raised rates 6.6 percent and 11.7 percent, respectively, after earlier raising rates in April.
Ryles, who has an insurance agent’s license and contributed $500 to Hudgens’ 2014 re-election campaign, said the money flowing to Hudgens’ campaign isn’t surprising.
“The bottom line is they (regulated business donors) have a vested interest in what government does,” he said. “They can measure their success, what they want, what they get, and what government does.”
Ryles’ take on Hudgens: “He’s very pro-business and far less likely to question a filing or an industry position than I would be.”
Hudgens, who earns about $120,000 a year as commissioner, is also a frequent guest of insurance lobbyists at conventions and restaurants. An AJC review of ethics commission filings found that insurance lobbyists spent at least $12,000 on meals, lodging and gifts for him over the past nine years. The Independent Insurance Agents of Georgia, whom Hudgens calls the “Big I,” have spent about $4,600 hosting the commissioner at its annual convention over that period. Last year, however, when the commissioner was facing re-election, Hudgens’ campaign paid for his lodging at the Amelia Island, Fla. event.
Still, Bill Hembree, an insurance agent who served in the General Assembly, said Georgia doesn’t have an insurance lapdog in the commissioner’s office.
“The insurance commissioner is still a very powerful person in the industry,” Hembree said. “I think Ralph brings a business perspective. I think he understands the consumer perspective but he also understands the business model.”