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Date of Issue: January 18, 2007

Insurance: Legislators want to slash rates, expand wind pool

Galvano pic
State Rep. Bill Galvano, who represents western Manatee County, including Anna Maria Island, says the special legislative session meeting this week in Tallahassee to address the insurance crisis has to "stop the bleeding, get stabilization in the market and then build from there." Islander Photo: Molly McCartney

It looks like Tallahassee has gotten the message that something drastic needs to be done to deal with the state's insurance crisis.

That was the judgment of state Rep. Bill Galvano as a special session of the Florida Legislature opened Tuesday.

Galvano predicted that lawmakers will slash premiums as much as 25 to 35 percent and expand access to the state's wind pool.

 "What we have to do in this special session is stop the bleeding, get stabilization in the market and then build from there," Galvano told The Islander newspaper.

 Galvano, a Bradenton attorney,  represents western Manatee County, including Anna Maria Island, and has been a leader in trying to find solutions to the insurance crisis.

The legislation proposed in the House of Representatives calls for mandatory reductions of 25 percent in insurance premiums for Florida property owners, Galvano said. The Senate version would cut rates by as much as 35 percent, he said.

These rate reductions and other reforms would be based on expanding the state's involvement in the insurance market, including changes in the operation of Citizens Property Insurance Corp., the state's insurer of last resort, and providing cheaper re-insurance to insurers.

Legislators who rejected this approach to the insurance crisis a year ago now say they will support such ideas because the nature of the problem is now so much worse.

Rep. Ron Reagan, an insurance agent and a Republican who represents eastern Manatee, told The Islander that his philosophy has changed in recent months because private enterprise has failed to provide the insurance needed by homeowners and business.

"My belief before was that the state should not be in the insurance business," Reagan said. "But the reality is that the state is in the insurance business" and has a responsibility to provide insurance products that people need at an affordable price.

 The legislative reform packages under consideration also would help owners of small businesses and commercial properties - including churches and office buildings - who have been unable to find affordable wind insurance, Galvano said in an interview with The Islander.

"The idea would be to allow Citizens to write wind coverage anywhere," without regard to the state-designated wind-pool boundaries, Galvano said.

This would be a major economic boost for many Anna Maria Island commercial property owners, especially those outside the wind pool and unable to qualify for Citizens wind policies.

Island residents and visitors would also benefit from a healthy business community - one that provides a unique flavor to Anna Maria's traditional culture.

 These pro-consumer measures reflect a massive change in the state's political landscape in recent days and an aggressive move by Florida's new governor, Charlie Crist, to help consumers by reforming the state's insurance system.

"Gov. Crist is very clear about what he wants," Galvano said. "He said he won't sign anything that doesn't have a mandatory rollback in rates."

In addition to pressure from the governor, legislators are feeling the heat from their constituents, Galvano said. "There has been a groundswell of support from around the state for reform, including our area here in Manatee and the barrier islands."

The result, he said, has "influenced lawmakers to look past the industry and look at the consumer."

Legislators also now recognize that the unavailability and unaffordability of property insurance, especially wind insurance, is threatening the state's economic engine.

"That is absolutely an issue," Galvano said. "This plays into our economy, from how we attract business, to affordable housing, to people being able to stay in their homes. This isn't lost on lawmakers and it is not lost on the governor." 

Galvano said that legislators are "hearing from people who say enough is enough, that Florida is not the place for them to be, and this is scary," he said. "I don't want to see that. I know our district depends on our coastlines and on people coming here to make a new life, whether for a new career or for retirement, and if we start seeing an exodus, it has an impact."

That doesn't mean the insurance industry has given up on its multi-million dollar campaign for pro-industry legislation.

"There are a lot of industry voices up in Tallahassee and a lot of lobbyists there working on behalf of the industry," Galvano said.

Nevertheless, he feels confident that there will be signification legislation passed to help consumers.

"There certainly is the atmosphere for getting a lot done," he said.

"There will be a debate, as there always is, but there are a lot of eyes on this. It affects each and every one of our districts. It affects the state economy. And for the governor, this is his first big test. This is the one he has to knock out of the park, and," Galvano said, "he is certainly approaching it in the right way."