Nelson rides crusader image on Senate trail

By SHELBY OPPEL

© St. Petersburg Times, published July 16, 2000

TALLAHASSEE -- Last fall, you might have caught Bill Nelson in Washington, D.C., proposing a home health care plan for Holocaust survivors. In June, he showed up on the front of the New York Times, trumpeting his successful crusade against a life insurance giant that cheated black customers.

Earlier this month in Tampa, the presumptive Democratic nominee for U.S. Senate portrayed himself as the consumer crusader yet again.

"Without someone to stand up to the big insurance companies and the powerful special interests," Nelson told a debate audience, "consumers will be ignored or defeated time after time."

Nelson, who has been Florida's elected insurance commissioner since 1994, says he is just doing his job. He's also doing a good job using his current job to campaign for a new one -- he wants Floridians to send him to the Senate this fall.

His pitch may be a tough sell, given what's happened to insurance prices since Nelson took office. Homeowners' rates have risen, deductibles are higher and residents in hurricane-prone South Florida still struggle to find affordable coverage.

Yet Nelson says consumers would be much worse off without him.

"They know," he said, "that I have stood up and fought."

As insurance commissioner, the 57-year-old Nelson helps set the rates Floridians pay for property, auto and health insurance. Eight years after Hurricane Andrew stunned South Florida, homeowners' insurance still commands the state's attention.

In that arena, Nelson's clout has limits.

While insurance companies still have to ask Nelson before they increase rates, they no longer need his approval. In 1996, the Legislature created an arbitration panel that can overrule Nelson if he rejects a rate increase. In eight out of nine cases, the panel has done just that.

As recently as this month, State Farm -- which insures nearly one-third of all Florida homes -- won the panel's approval to increase rates an average of 7 percent. A few days earlier, the panel okayed an average 96 percent statewide increase for homeowners who receive windstorm coverage from a state-run pool.

Overall, the cost of homeowners' insurance premiums has increased 109 percent since August 1992, according to Department of Insurance estimates. That's when Hurricane Andrew racked up $16-billion in insured losses across South Florida.

Nelson won election 27 months later, inheriting a market still shattered by the catastrophic hurricane damage. The losses from Andrew drove some insurance companies out of business; the survivors quickly shed policies or left the state altogether.

When critics point to rising rates, Nelson is blunt: At least now there are rates to be had, he says. Insurance from private companies -- rather than state-run pools -- is more widely available across Florida, though new policies remain scarce in storm-prone South Florida and along the coast.

"We see improvement, but the market is not cured," said Vince Rio, an attorney for State Farm. "But that's not (Nelson's) fault or our fault."

Moreover, Nelson says, if not for his efforts, rates would have climbed much higher.

Early in his tenure -- before the arbitration panel -- "there were these gargantuan requests, which I slashed," Nelson recalled.

Then, in 1997, Nelson persuaded State Farm and Allstate -- the state's second-largest home insurer -- to freeze their rates. State Farm's recent rate hike is its first in three years.

In 1998, Nelson persuaded many insurers, including State Farm and Allstate, to grant rate cuts or onetime rebates, albeit smaller ones than he originally had demanded.

But Nelson couldn't stop this month's hike in windstorm insurance rates for about 430,000 homeowners who must buy coverage through a state-run pool. Hernando, Pasco and Pinellas counties account for about 15,300 of those policies.

The high-profile loss illustrates the limits of Nelson's reach as consumer crusader.

In 1996 and 1997, the state-run pool (officially, the Florida Windstorm Underwriting Association) asked for rate hikes of 62 to 67 percent, but received less than half that in both years.

This year, however, Nelson fought an even higher rate request all the way to Leon County Circuit Court -- and lost. Windstorm pool officials argued that without higher rates for their customers, insurance companies statewide would make all homeowners pay the price after the next devastating storm.

An arbitration panel agreed and a judge backed it up, but Nelson continues to fight.

Nelson says his protests aren't designed to score points with homeowners headed to the polls this fall. The windstorm increase, he says, was based on faulty, unfair computer models that overstate the potential losses from the next big storm.

Win or lose, such fights provide regular fax machine fodder, a stream of press releases that often translate into newspaper headlines casting Nelson in his favorite role.

"The average citizen . . . does have the perception that I am a fighter," he said.

Two consumer groups that track insurance issues, Florida Consumer Action Network and the Consumer Federation of America, are quick to agree.

FCAN has endorsed Nelson in the Senate race, said Virginia Littrell, FCAN's executive director. Among other accomplishments, she cited Nelson's push to shrink another state-run insurance pool by moving most of those policies into the private market.

"Bill Nelson's our guy," she said, adding that her homeowners' insurance premiums increased 50 percent this year.

Bob Hunter, director of insurance for the Consumer Federation of America, said Nelson and his department consistently score at the top of that group's state-to-state comparisons.

"By any comparison with the nation, he's really way over to the consumer's side," said Hunter, a former Texas insurance commissioner.

Yet, over the last few years, the battles Nelson has chosen have been aimed at people who typically vote Democratic -- African-American and Jewish Floridians, in particular. That's bound to help him in his race this fall against Republican U.S. Rep. Bill McCollum and state Rep. Willie Logan, a South Florida legislator running without party affiliation. Had Nelson attracted serious opposition in the Democratic primary, it would have helped even more.

In June, Nelson scored another publicity coup when he announced that state regulators had reached a $206-million settlement with American General Corp., a national life insurance company that had overcharged millions of people for so-called "burial insurance." Many of the victims were black customers who paid higher premiums than whites, based on race-based formulas dating back to the 1940s.

Nelson also earned national attention last year for his role in the fight to force insurance companies to honor unpaid Holocaust-era claims, although Florida victims are still waiting for the companies to pay up.

Both battles began before he entered the Senate race, Nelson said, dismissing the notion that either was timed to boost his campaign.

But those causes -- along with a laundry list of busts and stings carried out by Nelson's fraud investigators -- inevitably generate favorable newspaper and television stories for the man at the top of the state Insurance Department.

"I tell you all of these stories," he said, "simply to tell you that it's been a wonderful experience of public service for me . . . of having to stand up and fight for people."

- Shelby Oppel can be reached at oppel@sptimes.com.

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