Mt. Vernon Register-News

November 12, 2013

Assignment of carriers risky business


The Register-News

---- — Dear Editor:

The Oct. 29 edition of the Mt. Vernon Register-News printed a news story entitled, “County makes insurance assignments.” The story caught my attention because I thought it was rather odd that the board would assign, dictate, or limit particular local agents to selected underwriters.

At no time do I remember any actions in the past that curtailed the normal business practices of local insurance agents and limit or assign underwriters from which they could obtain a quote. As for as I remember, previous boards practiced a simple, straightforward, free market approach for insurance bids in which any local agent could acquire a quote from any carrier in the underwriting business. As I understand it, if two or more local agents obtained the lowest quote from the same carrier at the same price, the board was free to select one agent or the other. Usually two criteria were invoked to make the selection. One, the board might consider which agent might give the better service or which agent might consider reducing his commission.

With this new bidding process in place for awarding contracts to insurance agents, manipulation and abuse seems much more likely to me. With the previous process abandoned and now the assigning of particular underwriters to local agents may seem of little importance, but I think those familiar with the insurance business know which underwriters are more likely to give lower bids for municipal or county business. With such knowledge, the one making the assignments may have the appearance, at least, of favoritism or of assigning a particular carrier to a favored local agent. I think that setting up a process like this just continues to undercut the confidence that the public has for our governmental units regardless of whether or not any unethical behavior results from the process.

I also want to remind your readers that two years ago when the insurance bids were under consideration, Mr. White took the board into “closed session” to discuss the bids. As I understand it, when the board came out of executive session, Mr. White disregarded the low bid based upon previously state specifications and, with board approval, awarded the contract to another local agent who seemingly had not followed the specifications. If the previously announced specifications were changed, it is entirely possible that the specifications as amended by the winning agent may have been more appropriate for the county’s needs but even if that is true, then the new specifications should have been given to the other agents for a new bid, it seems to me.

We need and deserve transparency. We don’t need our elected representatives to show such disregard for the public and the public’s right to know the full nature of how our county is being managed. I urge the county board to discontinue the potentially collusive practice of assignment of local agents to specify carriers and going into “closed session” to discuss bids. We deserve better.

Gary W. Wallace

Mt. Vernon