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Crist slams state insurer

 The GOP gubernatorial candidate blames his opponent for the state’s ills, but sidesteps his own role as a Cabinet officer.

Published June 3, 2006

Mark May 21 as the day Republican Charlie Crist made insurance center stage in Florida’s governor’s race: Sitting alongside the three other candidates in a forum before the Greater Miami Chamber of Commerce, Crist called the state-run Citizens Property Insurance Corp. “a disaster.”

His attack, long anticipated, sought to impugn the man sitting to his left, Tom Gallagher, his opponent in the GOP primary and one of Citizens’ creators. Today, Crist continues his critique, saying he would like to “blow up” Citizens in a taped interview for Political Connections that airs at 11 a.m. on Bay News 9.

“I didn’t create it, my opponent did,’’ Crist said in the interview. “I think, you know, casting blame is difficult to do, but the problem is that Citizens is a disaster. I don’t think there is any question about it.’’
But as Crist levies his attacks, he breezes past two key points:

Attorney general since 2003, he has been a member of the Cabinet with the same level of responsibility for insurance oversight as Gallagher, the chief financial officer. And his one specific idea for shoring up Florida’s insurance market — requiring companies writing auto policies to offer homeowners — has been rejected as unworkable by politicians and industry leaders alike.

With skyrocketing premiums, Citizens’ beleaguered condition and the start of a new hurricane season, it was all but assured that insurance would become a front-burner issue in this year’s governor’s race.

Private insurance companies continue leaving the market, dumping their policies into Citizens, which by law must charge the highest rates in the state. What’s more, when Citizens runs a deficit because its premiums don’t cover all claims, all Florida property insurance policy holders are assessed to pay the debt. Plus, Citizens is tainted by an ongoing criminal investigation into allegations one of its former officers took kickbacks from adjusters he hired in 2004.

Democrats have signaled that the winner of their primary — Jim Davis, a U.S. representative from Tampa, or Rod Smith, a state senator from Alachua — will have a ready-made issue to attack Republicans on.

But long before the November general election, insurance will play a role in the September GOP primary: The two candidates have shared insurance regulation authority since 2003, but only one of them talks about that on the campaign trail.

Gallagher, a two-time former insurance commissioner, is the candidate most versed in insurance and the one who has been most aggressive in proposing solutions.

He’s also the one most closely linked to the current system, which is now surviving on a steady diet of premium increases by percentages in the double- and triple digits.

Gallagher, insurance commissioner in the wake of 1992’s Hurricane Andrew, helped design Citizens and its predecessors, as well as the Florida Hurricane Catastrophe Fund, a state-backed reinsurance fund facing a deficit for the 2005 storms. Until the 2004 hurricane season, those creations were credited with resuscitating an insurance market in free fall after Andrew.

On the stump today, Gallagher acknowledges voters’ pain and frustration, but he doesn’t apologize. He argues that with eight hurricanes in 2004 and 2005, the fact that Floridians can still find insurance at all is a form of success. And he pledges to push to keep premiums from growing too much more.

“With $30-billion in payouts (in claims) in a 15-month period and the weather service telling us that we have 10 more years of the same thing, we’re not going to see any downturn in premiums or a way to get them down in general,’’ Gallagher said last month to the Miami chamber.

Crist’s goal is to turn Gallagher’s record into a liability while ignoring his own role.

Since becoming attorney general, Crist, as a member of the statewide Cabinet, has shared with Gallagher, Gov. Jeb Bush and Agriculture Commissioner Charles Bronson the responsibility for overseeing Florida’s insurance market and hiring its regulator, Insurance Commissioner Kevin McCarty.

Crist acknowledged, in an interview with the St. Petersburg Times last week, that he has deferred to Gallagher on insurance issues.

“But we didn’t have a crisis … when I started on the Cabinet (in 2003),’’ Crist said. “This crisis wasn’t brought about by ideas I came up with eight or 10 years ago.”

But Crist also hasn’t been part of any solution. As Florida lawmakers wrestled during the recently completed legislative session to shore up the state’s market, Crist stayed clear of the debate.

He recently signaled support for a federal catastrophe reinsurance fund when the Cabinet unanimously passed a resolution asking Congress to create one. Gallagher, Bush and others, however, have pushed the same idea since at least 2004.

Last November, while speaking to the DeLand Chamber of Commerce, Crist called for finding a new insurance commissioner — but has taken no steps to fire McCarty.

Crist said he supports returning insurance regulation directly to an elected official, but when a bipartisan group of lawmakers called in February to do just that, he was silent.Now, Crist is putting insurance front and center, trying to tap the rising angst of voters frustrated by their hefty insurance bills.

He proposes “restructuring Citizens” though he doesn’t give specifics on what that means. He promises to push anew for a federal reinsurance fund. And he said he’ll lure more private insurers to the market by mandating insurers writing automobile coverage also offer homeowners coverage.

“A lot of companies come here and they’re leaving here in terms of home­owners (insurance) but they’re not leaving in terms of auto,’’ Crist said. “It strikes me that if they want the bountiful joy of 18-million consumers, they ought to be here for the tough stuff, too.’’

But Crist’s proposal already has been rejected by Florida’s Republican-led Legislature as unconstitutional. Even state Democrats, who crafted their own plan for overhauling the state’s windstorm market, rejected the idea as impractical.

McCarty, the insurance commissioner, said such a mandate would likely send Florida’s auto insurance market into crisis as well because insurers would leave rather than write property insurance.

“The bottom line is … if (insurance) investors don’t feel that there is a rate of return sufficient for their risk then they’re not going to put their capital at risk,” McCarty said last week. “You can’t force people to put their capital at risk.”

Industry watchers have been similarly skeptical, noting some of the state’s biggest auto insurers, Geico and Progressive, don’t even sell property insurance.

“It’s a terrible idea,’’ said Robert Hartwig, chief economist of the Insurance Information Institute in New York. “It’s probably not even legal. … It’s like telling a regional airline out of Tallahassee that flies only in the state of Florida that now they need to offer nonstop service to Moscow from Tallahassee.’’

Crist, however, is unfazed, saying that what is more important is that he’s the Republican candidate for governor who is committed to doing things differently.

“Anybody can find a reason an idea won’t work,’’ Crist said. “But what we’re doing isn’t working, it’s broken. I’m going to give new ideas a chance before plugging holes in them and just saying they won’t work.’’
Starting Monday, Crist’s appearance on Political Connections can be seen at no cost on Channel 340 (Tampa Bay on Demand).

Times staff writers Alex Leary and Adam C. Smith contributed to this report. Joni James can be reached at (850)224-7263 or

[Last modified June 3, 2006, 21:11:04]

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