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Secret insurance provision sparks legislative uproar

The state Senate is set to vote today on a budget proposal for next year. Most of the bill is focused on spending. But some provisions aren't about the budget at all. State Insurance Commissioner Wayne Goodwin was not happy yesterday. He'd just discovered that the Senate budget contained a special provision that would take away his authority to regulate insurance rates. That power would be given to a panel of political appointees instead. Goodwin held a press conference to protest. "This happened so fast, in the cover of darkness, that I don't know who's behind it. But I have my suspicions," said Goodwin. "But no matter who was behind it, ladies and gentlemen, I was elected to stand up for the working people and the consumers of this state. And the small businesses who are worried about insurance rates." Goodwin says if lawmakers want to change his department, it should be done in the open, not in the budget. "This is not a budgetary item," he said, "This is a huge policy change, to take away protections that consumers have." Stripping an elected official of his power would be a major policy change. And you might think Senate budget writers would notice something like that. But they didn't. Senator Katie Dorsett co-chairs the subcommittee that wrote that section of the budget. "I do not know where it originated. It came to our committee, we included it, and I was not aware of it," said Dorsett. The provision was in the measure when Dorsett's committee voted to approve it. But her co-chairman Senator Bob Atwater couldn't say where it came from, either. "Not exactly sure frankly," he explained. "It was just given to us. It came through the chairs I don't know where it actually emanated." One level up, the lead budget writers didn't know much more about the provision than Dorsett or Atwater did. Senator A. B. Swindell is one of the so-called big chairs. "I know that it was put in there to try to structure the insurance rate-making the same way you would do with our other--such as utilities and things. But I'm not sure on the dotted line who it was that suggested that," he said. Senate budget provisions used to be labeled with the name of the senator who requested them. That isn't the case anymore. But surely if Senate leadership wanted a major policy change, Majority Leader Martin Nesbitt would know about it, right? Well, maybe not. "Well, we're having difficulty figuring it out. There was a problem with the beach plan that they were trying to address, but I think we're going to take that provision out," he said. "The bill just now got to committee. It is a proposed bill, and it'll be removed before it even gets here." The controversial provision was removed, and shortly after that, Senate leader Marc Basnight announced the provision had come from his office. But he says it was a mistake. "I didn't even know it was in there," he explained. Basnight represents a lot of coastal homeowners who are angry about rising insurance rates. The target of their wrath is insurance Commissioner Wayne Goodwin. "Well, he worked us up real good in the 20 coastal counties when he stuck it to us with the rate increases that we experienced," said Basnight. Basnight wants big changes in insurance regulation. He says he intended to run them as a separate bill, but that his general counsel mistakenly put them in the budget instead. "No, no. I never wanted that in there," he said. "That is my fault, which is obvious. I didn't want it in. The minute I saw it in I said 'take it out'." Basnight says this is an isolated occurrence. But Senate Republican leader Phil Berger doesn't think so. He says mystery provisions show up all the time, and they're usually political. "In many respects," explained Berger, "unfortunately what you see is that kind of thing is used as a way to threaten some agency or to threaten some individual within state government." Whatever happened this time, Berger says, it's obvious the process isn't working the way it should. "You know that's part of the problem with the way the Democrats have constructed budgets for years: that they materialize full-blown on somebody's desk one morning and in many respects it's as if it was transported here from an episode of Star Trek," he said. "The secrecy that surrounds the budget is something that really needs to change." The insurance provision is gone from the bill the Senate will vote on today, but plenty of others are still in it. Most probably won't survive in the House, where the budget measure will get a lot more debate.