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Insurance Commissioner Tom Gallagher wants an explanation for what he calls "exorbitant'' increases.
By JEFF HARRINGTON
© St. Petersburg Times, published September 6, 2001
Emboldened by a court ruling, Florida Insurance Commissioner Tom Gallagher has ordered the Florida wind pool to justify hefty rate increases being imposed this summer and to refrain from future increases.
The Florida Windstorm Underwriting Association, better known as the wind pool, provides state-required windstorm coverage for about 424,000 coastal residents, primarily in South Florida.
In the Tampa Bay area, the wind pool has 11,484 policies in Pinellas County; 5,645 in Pasco County; and 833 in Hernando County.
Over the objections of Gallagher's predecessor, Bill Nelson, the pool received an arbitration panel's blessing last year to phase in a 96 percent average statewide increase over several years.
A state hearing officer last week ruled that the Florida Department of Insurance has "plenary" authority over the wind pool and its operations.
Under Gallagher's interpretation, that means the wind pool must work through his department for final approval of its rates and operational plans. "We are already fighting the exorbitant windstorm rate increases being phased in," Gallagher said Wednesday. "The hearing officer's ruling ... opens another door for us to pursue rate relief."
The windstorm association intends to file a response within the 21-day deadline. But spokesman Ron Natherson said the group has a "legal obligation" to charge the higher rates approved in arbitration.
Separately, Gallagher said he is opening an investigation into 225 consumer complaints about the wind pool that the department has received in the past year. Complaints include claims of unreturned premiums, unfair claim denials and failure to provide discounts for home improvements, he said.
Natherson disputed the description of the nature of most of the complaints and said he was proud of a complaint rate well under 1 percent based on the number of policies.
- Jeff Harrington can be reached at harrington@sptimes.com or (813) 226-3407.