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New insurance director faces many challenges

Ray Farmer is working to provide better customer service and grow the insurance industry as the new director of the state Department of Insurance.
Ray Farmer is working to provide better customer service and grow the insurance industry as the new director of the state Department of Insurance.

By Licia Jackson
Published Jan. 7, 2013

For Ray Farmer, retirement didn’t last long. His final day as a vice president of the American Insurance Association was at the end of November, and after just one weekend he started his next job as the director of the S.C. Department of Insurance.

His new boss, Gov. Nikki Haley, gave him two priorities: to provide great customer service and to grow the insurance industry.

Just a month into the job, Farmer is working hard on both of those, as well as the many critical issues the insurance industry is facing.

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Right off the bat, the Department of Insurance is expanding hours in the consumer services division, from 8:30 a.m. to 7 p.m. on weekdays.

“This way working people can contact us with questions or to get help with complaints,” Farmer said.

And the department’s Charleston office is getting a staff person to help consumers with issues. In Greenville and Myrtle Beach, Farmer is deploying a part-time consumer services person who will share an office with another state agency.

As far as growing the insurance industry, Farmer’s focus is on captives, companies established to insure risks stemming from their parent group. While South Carolina has been one of the top states for captive insurance companies, “in the last few years a few have gone to other states,” he said.

The Department of Insurance is reviewing all practices and processes related to companies coming into the state, with an eye on making them more efficient, he said.

“The more carriers licensed in South Carolina, the better off our customers will be,” Farmer said. “Competition is the best arbiter of rates.”

And new companies coming in will mean new jobs added to the 30,000 the insurance industry already employs in the state.

Rates, especially for coastal homeowners, are one of the top three issues for Farmer in his new job. The other two are health insurance and long-term care insurance.

Thanks to South Carolina’s regulatory environment, there’s no problem with availability or affordability of homeowners’ insurance, Farmer said.

“People don’t like to pay what they have to pay, for anything, much less insurance,” he said. “The informed consumer will be shopping for homeowners and other lines of insurance, like they should every year.”

The Affordable Care Act is the law of the land, and Haley, in consultation with legislators, has already made the decision not to adopt a state-run health insurance exchange. The next deadline is in February, when the governor must decide whether to enter into a partnership with the federal government in running an exchange, Farmer said.

The state will have responsibilities regardless of the decision on an exchange, Farmer said.

“We will do everything we can to get the word out. Business consumers will be informed as well as possible. The consumer services division will have to answer consumer questions,” he said.

The issue with long-term care insurance is availability, Farmer said. This insurance helps pay for care in a nursing home, assisted living center or at home for a person who needs assistance with daily living activities.

“The number of companies coming into the marketplace has dwindled,” he said. The Department of Insurance has proposed regulations and is discussing with companies their options before registering in South Carolina.

“Rates will continue to go up because of the nature of that line of business and the age of the population,” Farmer said. “But it is still a good coverage.” He pointed out that a yearly premium of say, $3,000, may be the same as the cost of just a few weeks in long-term care.

Another customer service improvement will be updating the department’s website, The idea is to make it more user-friendly, allowing consumers to file questions or complaints directly through the website, Farmer said.

Many aspects of the department are already in great shape, Farmer said, and those will be continued. One is S.C. Safe Home, a mitigation effort that guides homeowners to take steps to protect their homes from hurricane damage, sometimes providing a grant of up to $5,000.

“This is a gem that the South Carolina Legislature created with the Omnibus Act of 2007,” Farmer said. “It has been examined and emulated in other states.”

Some states use funds received from FEMA to start similar programs.

This year, the Department of Insurance’s legislative package will focus on items necessary for accreditation by the National Association of Insurance Commissioners.

Farmer, who has spent most of his life in Atlanta, has more than 40 years of experience in the insurance industry. Most recently he worked as vice president for the Southeastern region of the American Insurance Association, a trade association with 300 companies as members. He provided members with information about the eight states in the region, including South Carolina, to help them decide where to place capital and where to write new business.

“I know what companies are looking for,” he said.

Before working with AIA, he was deputy commissioner of the Georgia Insurance Department’s enforcement division. “I took administrative actions against companies,” Farmer said. “I am no stranger when that needs to be done.”

His first insurance job was working as an insurance adjuster for an independent adjusting firm. There, he learned about insurance law and policy and its interpretation, as well as a lot about human nature. “You are helping people with a stressful situation.”

Farmer’s educational vita includes a degree in insurance from the University of Southern Mississippi and a law degree from John Marshall Law School in Atlanta. He and his wife, Gayle, have two children and five grandchildren.

Farmer has moved to South Carolina for the first time, and he looks forward to a new adventure.

“I can help people,” he said. “At this stage of my life, that is what I need to be about.”

Reach Licia Jackson at 803-401-1094, ext. 206.

Previous coverage

Haley names S.C. insurance commissioner
Director of South Carolina Department of Insurance resigns