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Date of Issue: September 07, 2006

Insurance: So you want to know more?

If you want to determine if you're eligible for the wind insurance available through the state-sponsored Citizens Property Insurance Corp. for some residential and commercial properties on Anna Maria Island, you have to know something about what is commonly called the wind zone or the wind pool.

Exactly what is the wind pool?

It is a designated area on Anna Maria Island with specific boundaries. It begins on the shore of the Gulf of Mexico and extends east for 1,000 feet. It does not run in a straight line; it jumps from street to street at odd angles, as it follows the coastline that existed back in 1986 when the wind pool lines were drawn.

If your property is within the state's boundaries for the wind pool, you are eligible for wind insurance from Citizens.

And if your property is outside that "zone," you may also be eligible, under certain conditions. To qualify for Citizens outside the wind pool, your property must be limited to residential use.

Commercial property — or any other kind of non-residential property — outside the zone does not qualify for Citizens.

     But if your non-residential property is outside the wind pool and has a value of $1 million or less, you may be eligible for wind protection from a new state program sponsored by the recently established Florida Casualty and Property Joint Underwriting Association. The new JUA wind insurance was supposed to be available through local insurance agents Sept. 1.

This newest wind insurance program is a limited measure aimed at providing immediate relief for small businesses that have been unable to find wind insurance, according to state Rep. Bill Galvano, who has been leading the campaign to find long-term solutions to the insurance crisis.

"I wish it had been way beyond $1 million," Galvano said of the new JUA limits. "But it is a step in the right direction. I think we need to go in and have a special session of the Legislature. I think we need Citizens to provide all wind coverage."

In the past ...

The history of the effort to accomplish that on Anna Maria Island is a long and tortured tale stretching back more than three decades.

In one letter dated Sept. 17, 1974, and buried deep inside the records of the Florida Office of Insurance Regulation, a Bradenton insurance agent had this to say about the insurance needs of Anna Maria Island property owners.

"For some unexplained reason, our Bradenton beaches have been excluded from coverage under the state wind pool. It really does not make good sense for the Longboat Key area and beaches to the south of Anna Maria Island to be eligible for the wind pool and the St. Petersburg beaches to the north to be eligible for the wind pool. And yet our own Anna Maria Island is not eligible. Time and again we are told by (the) underwriters to use the wind pool for Anna Maria when we cannot. The reason for writing you is to ask that you make every effort to contact the powers that be and see how soon we can have Anna Maria Island included in the Florida wind pool...."

The 1974 campaign failed. But insurance agents tried again in the 1980s, when they asked for a smaller slice of the wind pool.

In a written request dated Jan. 30, 1986, the Manatee County Independent Insurance Agents Association asked that state insurance officials include "all areas (of Anna Maria Island) lying within 1,000 feet of the Gulf of Mexico" in the state wind pool.

A public hearing was held three months later on March 27, 1986, at the Anna Maria City Hall. The hearing officer listened to a parade of witnesses speak in support of the petition.

There was one notable opponent: the Florida Windstorm Underwriting Association – the state organization that preceded Citizens Property Insurance Corp. The FWUA challenged the testimony and urged that the application to include Anna Maria Island in the wind pool be denied.

Despite that opposition, the hearing examiner recommended that the state wind pool be expanded. In his findings, dated May 28, 1986, the hearing examiner said: "The record is clear and overwhelming the residents have a dire need for windstorm insurance coverage; they are unable to secure such coverage through normal markets."

On Aug. 7, 1986, the areas of Anna Maria Island "which lie 1,000 feet of the Gulf of Mexico" became eligible for participation in the wind pool. The effect of that decision was to include all of Bradenton Beach – but only certain portions of Holmes Beach and Anna Maria City.

The 1986 boundaries, which reflect the 1986 coastline, are still in effect, even though the coastline has changed dramatically over the past two decades, leaving some Island property that is within 1,000 feet of today's coastline outside the designated wind pool and ineligible for Citizens insurance.

Finding exactly where the 1986 boundary runs through Holmes Beach and Anna Maria City isn't easy. But there is a page on the Citizens Web site at that lists the streets and street numbers that qualify for the wind pool.

Arbitrary line?

Rep. Galvano has contended for months that the 1,000 foot rule for Anna Maria Island is "arbitrary and capricious."

The wind pool boundaries for Anna Maria Island are particularly puzzling when compared to the boundaries for Sarasota County's wind zone. In Sarasota County, the entire city of Sarasota is included in the wind pool.

Bradenton insurance agent John C. Laurie believes that there should be a scientific basis for the wind pool boundaries. That's why he worked with Galvano to draft an amendment to the state law that would redefine the wind pool boundaries for five Florida counties, including Manatee.

The Galvano amendment failed in the last session by one vote. The final tally in the Florida Legislature was 57-56.

Among those voting against the Galvano amendment was state Rep. Ron Reagan, a Republican who represents eastern Manatee County.

Rep. Reagan is a Bradenton insurance agent.

In a telephone interview with The Islander, Reagan gave two reasons for voting against the Galvano amendment. One reason for his opposition, he said, was that the amendment "was not the right thing to do at the time because it would have dumped several thousand more policies into Citizen."

Another reason he voted no, he said, was because he was following the recommendation of the Republican leadership in the Legislature.

Reagan said that he would support expansion of the wind pool for Manatee County if it can be done with "proper" legislation that would encourage insurance companies to start writing policies again.

"I don't want the state in the insurance market," Reagan said. "But if we can back the re-insurance market and make it so that companies can get their losses covered, I believe we can get the companies to come back."

After his amendment to expand the wind pool failed, Galvano found a rule-making procedure that could be used to quickly create a joint underwriting association to issue wind coverage to commercial property owners unable to find insurance through the regular market. Working with Kevin McCarty, the state insurance commissioner, Galvano pushed ahead to get that rule approved.

Recognizing the need for quick action, the Florida Cabinet voted Aug. 15 to establish the Florida Casualty and Property Joint Underwriting Association. The board of the new JUA met Friday, Aug. 25, for the first time and immediately began contract negotiations with ICAT Specialty, a creation of a Colorado-based company, to provide policies to small businesses seeking to insure a property valued at no more than $1 million, coverage for contents and business materials of no more than $750,000, and coverage for business interruption of no more than $250,000.

The JUA board voted to establish a rate of $1.49 per $100 of coverage for the new policies.

ICAT Specialty has no rating from the insurance rating service, A.M. Best, because the company was created in July and is too new to have a rating, according to ICAT Specialty spokesman Greg Butler. He said ICAT Specialty currently has 9,600 Florida policyholders and 10 Florida employees.

The new wind policies to be issued by ICAT Specialty won't be immediately available for every agent in Florida, Butler said. Which agents will be able to write the policies? "We don't know yet," he said. "We're still working on that with the Office of Insurance Regulation."