BY MOLLY MATTHEWS
DBJ Contributing Writer

With the absence of HMOs in the state, how will it affect the Delta? Not much, say insurance execs. Because the Delta does not have a population base to support an HMO market, it won't make much difference.
"HMOs thrive on dense population areas, of which there are about three that possibly could support some form of a properly marketed HMO," said George Dale, state insurance commissioner for the Mississippi Department of Insurance. "Of the 16 HMOs that came in here initially, only three are still in business and only one is writing any business. I think they probably under-priced the product and violated the cardinal rule of insurance: if you are paying out more than you take in, you're not going to stay in business."
HMOs could return to the state - and the Delta - if its vehicle was via a large corporation, he says.
"It would have to be in a population area that could provide enough customers to make an HMO successful," Dale says. "And it would have to be a very large corporation, like WorldCom. Without that, I think it would be highly improbable for an HMO to make it in Mississippi."
In the next few years, major changes will take place in the insurance industry, including changes in how it's regulated, Dale says.
"Nationwide trends indicate a mass of mergers and acquisitions of insurance companies," he says. "There will be changes in how insurance is marketed and the part the Internet plays. There will also be changes in the involvement of financial institutions, such as banks and credit unions, providing and selling insurance."
A push toward federal regulation of insurance, with less state regulation, will be backed by foreign-owned insurance companies, Dale says.
"When they do business in the U.S., they have to deal with 50 insurance commissioners and they're not used to that," he says. "If they - and other backers - are successful, you'll see a move toward more federal regulation and less state regulation of insurance."