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A Citizens may be needed for businesses

Gov. Bush wants the Cabinet to look into the possibility of an insurer of last resort for companies that can't get coverage.

By JONI JAMES
Published July 27, 2006

TALLAHASSEE - Gov. Jeb Bush said Wednesday that he will ask the state Cabinet next week to consider creating a new statewide pool for businesses that can't find property insurance.

Bush said he's intrigued by an idea to resurrect a dormant state law that would create an insurer for business not unlike Citizens Property Insurance Corp., which is geared largely toward the residential market.

Exactly how such an insurer would operate, and whether it would result in lower premiums for businesses was unclear. At Tuesday's Cabinet meeting, staff for the Office of Insurance Regulation are expected to spell out far more specifics.

But Bush's willingness to consider the idea comes as Florida businesses increasingly complain it's hard to find insurance coverage in the wake of the 2004 and 2005 hurricanes. And unlike homeowners insurance, only businesses in coastal areas can buy coverage from the state-backed Citizens Property Insurance. Such coverage is capped at $1-million.

It also comes as Florida's insurance crisis seeps deeper into the political debate surrounding this fall's elections,

"There are two camps. One thinks that insurance rates are so high that it impacts business," Bush said. "Others are saying they can't get insurance."

Bush stopped far short Wednesday of saying he would vote for such a plan, which insurance regulators have been quietly exploring for weeks. Bush and the Cabinet oversee insurance regulation and would have to approve any new rules written to resurrect such a pool under a 1986 law.

It wouldn't be the first time Florida regulators have resuscitated the law, which was originally designed to deal with a commercial liability insurance issue but was legally challenged before it was implemented. After 1992's Hurricane Andrew, then-Insurance Commissioner Tom Gallagher temporarily used the law to provide coverage for hurricane victims whose insurance companies had gone bankrupt but their damaged homes prevented them from finding other coverage, leaving them vulnerable to their mortgages being called.

Gallagher, who is vying to be Florida's next governor, said Wednesday that he supported resurrecting the insurance pool.

Bush's support, in reaction to several ideas suggested Wednesday by Senate President Tom Lee, R-Valrico, comes as the state's growing insurance crisis provides fodder for political campaigns, particularly against Republicans or politicians who are linked to the current system.

Bush has endorsed Lee's candidacy for chief financial officer against his primary opponent, Rep. Randy Johnson, R-Celebration.

Also seizing the insurance issue has been Cabinet member Attorney General Charlie Crist, hoping to cast a shadow on Gallagher, now the state's chief financial officer and Crist's primary opponent for the Republican gubernatorial nomination. Democrats, too, have broadly blamed the Republican leadership.

On Wednesday, Democrats launched a new attack. "We need more specifics," said Rep. Dan Gelber, D-Miami Beach, who is expected to be the House Minority Leader after the November elections. "If it is merely a pool of only high-risk accounts, how will we avoid repeating the horrible mistakes the administration made when they created Citizens?"

The governor brushed aside questions about whether his support Wednesday was politically timed to help Lee or other Republicans.

"I don't have to look at polls. I can tell you (insurance is) the No. 1 problem in the state." Bush said. "If we can get a consensus on ideas, the elections to me are not a relevant factor in this. It may be to others."

Also on Wednesday, Bush appointed 15 members to an insurance reform task force charged with providing new ideas for shoring up the state's private insurance market before the beginning of the 2007 legislative session. But Bush said he was hoping consensus might emerge sooner, possibly prompting a special session before the November general election.

In letters to Bush and Lt. Gov. Toni Jennings, whom Bush appointed to lead the insurance task force, Lee urged consideration of the new state insurance pool for businesses.

Lee also suggested that the state might use affordable housing trust fund dollars to help low-income families pay skyrocketing insurance bills; and he suggested the state might want to expand its reinsurance fund, which currently provides $15-billion in low-cost reinsurance to retail insurers, in order to alleviate the need for Citizens.

Joining Jennings on the governor's task force are two bay area appointees: Lee Arnold Jr. of Clearwater, chief executive officer with Colliers Arnold International; and A.D. "Sandy" MacKinnon of Tampa, chief executive officer and owner, Yale Lift Trucks of Florida and Georgia.

[Last modified July 27, 2006, 00:56:37]