WHO'S LOOKING OUT FOR US?
A TIMES ANALYSIS
By TOM ZUCCO, Times Staff Writer
Published September 18, 2006
They are 15 men and women, many of them people
you've never heard of, who are going to try to save Florida.
Sometime in the next few months, they have to
find workable solutions to a numbingly complex property insurance crisis that is
driving residents out of their homes and business owners out of their stores.
They are members of the Property and Casualty
Insurance Reform Committee, appointed in June by Gov. Jeb Bush. They have met
three times since their inception, and their first report is due by Nov. 15.
A dozen Republicans and three Democrats.
Eleven men and four women. The Florida chief executive officer of Wachovia Bank
and other bankers, a retired schoolteacher, lawyers, developers, three state
legislators and the lieutenant governor.
But looked at another way, there's a looming
problem.
Something akin to foxes guarding the henhouse.
At least 10 members have either received
campaign contributions from the insurance industry, worked for a business linked
to insurance or had some other association with the industry.
Two members, Frank Kowalski of Miami and Don
Brown of DeFuniak Springs, are insurance agents.
Brown is more than an agent. He is also a
Republican state representative who served on the House Insurance Committee and
helped craft much of the Legislature's property insurance bills last session.
Among the awards he has received during his career is the Excellence in
Government Award by the Professional Insurance Agents of Florida in 2003.
Like the two other legislators on the
committee, he has received tens of thousands of dollars in campaign
contributions from the insurance industry.
All of which leads to this question:
Is asking people with even marginal ties to
the insurance industry to be objective in this mission tantamount to losing your
wallet at the beach and looking for it in the mountains?
Some people think that's exactly the case.
"We know where they're going, it's a foregone
conclusion," said Bill Newton, executive director of the Florida Consumer Action
Network. "The insurance industry and the developers want deregulation and to let
insurance companies buy reinsurance more cheaply (from the state), which is just
another form of subsidy."
Newton said he and other consumer advocates
volunteered to serve on the committee, but were turned down.
So where is the voice of the consumer?
Most committee members say they are acting as
consumer advocates, although no one has that specific job.
Committee member and former Allstate
spokeswoman Leslie Chapman- Henderson serves as Bush's consumer representative
on two other committees. But on Insurance Reform, most of her focus has been on
making homes stronger through a nonprofit that partners with, among others,
property insurance companies.
Still, she thinks the committee will keep an
open mind as to what will fill the immediate needs of homeowners. "There's a lot
of listening to, for instance, a state-funded wind pool," she said. "I don't
stand philosophically opposed to anything that fairly and competently resolves
this."
It's too early in the process to know how the
composition of the committee will affect the recommendations it makes. But there
are some danger signs for consumers.
Skeptics point to a recent attempt by state
government to solve the crisis that seemed like something out of a Charles
Dickens novel. In the last days of the 2006 legislative session, lawmakers
thought the answer was to mail every homesteaded property owner a check for
$140, supposedly to defray insurance costs. That idea, championed by Bush and
reform committee member Sen. J.D. Alexander, R-Lake Wales, quickly fizzled when
it was learned the process would cost the state $4.7-million.
Alexander, a member of the Senate Banking and
Insurance Committee, received at least $95,790 from the insurance industry for
the 2002 and 2004 election cycles.
And he is far from the only - to use an
insurance term - beneficiary. This year, the property insurance industry has
contributed at least $1.7-million to candidates and political parties taking
part in statewide elections.
The industry also contributed at least
$200,000 to Bush's 2002 re- election campaign, which could help explain why he
has farmed out this particular crisis.
But fear not: Reform committee members insist
they can watch out for consumers.
Linda Loomis Shelley, former general counsel
for Gov. Bob Graham and former chief of staff for Gov. Lawton Chiles, said the
committee is headed in the right direction, in no small part because of the
direction of its chairwoman, Lt. Gov. Toni Jennings.
"I have great confidence that Toni Jennings
will be able to do this because I have seen her do this when she was in the
Senate," Shelley said. "She has a very sharp intellect and a style that allows
all parties to be heard."
As for consumer advocates on the committee,
Shelley considers herself one, along with Jennings, Chapman-Henderson and
retired teacher Barbara Weese .
Ultimately, Shelley said, if the solution
isn't a strong product, it won't make it through the Legislature. "The
challenge," she said, "is to come up with something that is fair to all sides.
But it can't be universally saluted. That can't be the goal. If there were an
easy answer, it would've been done already."
The committee often hears from experts who lay
out a wilting barrage of terms that sound like a foreign language to those not
familiar with the industry. That can also be to the industry's advantage.
Weese, who lives in Leesburg, has been to only
one meeting and is trying, she said, to get a feel for what's going on.
"I asked to be on the committee, and was
surprised to be on it," she said. "Most of them are CEOs or legislators. I don't
fit in either of those categories. I'm the only person on there who no one knows
why they're there."
But Weese knows. She is there because of her
affiliation with AARP. She is a regional advocacy coordinator.
"I think the committee is beginning to get a
feel for things like mitigation and helping people to retrofit their houses,"
Weese said. "Hopefully, that will get insurance down."
Another outsider, Bill Montford, CEO of the
Florida Association of District School Superintendents and a former Leon County
commissioner, said he's satisfied with the direction the committee is taking.
"The lieutenant governor is keeping us on task
and in line," Montford said. "The problem is that there's so much to cover and
so much to learn. And we're under the gun to move as quickly as we can.
"I'm not an insurance expert."
But he need not look far to find one.
Seated around the table at every reform
committee meeting is an 18-member technical adviser committee that's packed with
high-level insurance company executives. The advisory committee, appointed by
Bush, includes senior officials from Allstate, Travelers, State Farm, American
Strategic, U.S. RE, the MacNeill Group and Southern Oak insurance companies.
Many of those companies have asked for, and
most have received, double-digit rate increases this year.
Other members include Dan Sullivan, a
Nationwide agent from DeFuniak Springs; John Laurie, a Bradenton insurance agent
and board member of the Florida Association of Insurance Agents; and Bert Combs,
a Tallahassee lawyer who specializes in insurance law.
But, say members of both committees,
information is still being gathered, and it would be wrong to assume the
solutions that end up being recommended won't be consumer-friendly.
"We haven't heard everything yet," said
Rockledge Mayor Larry Schultz, a member of the reform committee. "We still have
a lot of questions to ask. And I do not presuppose any kind of conclusion."
But the committee, he said, is looking in the
right direction.
"And I hope we find that missing wallet."
Others are not so sure.
Jennings, Brown and Alexander did not return
calls for comment. But during an appearance in Coral Gables last week, Rep. Juan
Zapata, R-Miami, complained that Brown is "in the pocket of the insurance
companies."
Brown, who has been an insurance agent for 30
years, later replied that he is "not a fan of insurance companies any more than
anyone else. ... But I do have a background and understanding of the industry
that helps me navigate through a very complex issue."
Bush, who leaves office in January, has said
he will call a special session of the Legislature to address the issue if there
is general agreement in advance of the committee's recommendations.
So the financial fate of tens of thousands of
Floridians rests, at least in part, with these 15 people.
When asked last week why there are no consumer
advocates on the reform committee, Bush asked a question of his own.
"Do they have any ideas?" he said. "You don't
have to be on a board to be able to provide advice and counsel and ideas.
"Get back to the critics and say, 'We are
anxious to hear their views.' "
Which leads to one more question.
Who will be listening?
Times staff writers John Martin and Joni James
contributed to this report. Tom Zucco can be reached at zucco@sptimes.com or
(727) 893-8247.
THE PROPERTY AND CASUALTY INSURANCE REFORM
COMMITTEE
Lt. Gov. Toni Jennings (chairwoman): Former
state Senate president, former president of Jack Jennings & Sons Construction
Services, Orlando. Republican.
Leslie Chapman-Henderson: CEO of Federal
Alliance for Safe Homes, a disaster safety organization with partners including
State Farm and St. Paul Travelers. Tallahassee. Republican.
Sen. J.D. Alexander (R-Lake Wales): Atleast
$95,790 in campaign donations from the insurance industry for 2004 and 2006.
Lee Arnold, Clearwater developer, CEO of the
Arnold Cos. Republican.
Rep. Don Brown (R-DeFuniak Springs): At least
$47,000 in campaign donations from insurance industry for 2004 and 2006.
J.D. Collins, Jacksonville developer, CEO of
Collins Group Inc. Former president of Florida Home Builders Association.
Republican.
Manuel de Zarraga, Coral Gables real estate
investment banker. Republican.
Robert Helms, Florida CEO of Wachovia Bank.
Jacksonville. Republican.
Frank Kowalski, president, Koski & Co.
insurance agency, Miami. Republican.
A.D. "Sandy" MacKinnon, CEO of Yale Industrial
Trucks, Tampa. Republican.
Bill Montford, Florida Association of District
School Superintendents CEO. Tallahassee. Democrat.
Rep. Dennis Ross (R-Lakeland): House Insurance
Committee chair. Lawyer specializing in insurance litigation.
Larry Schultz, Rockledge mayor. Florida
Municipal Insurance Trust chairman. Republican.
Linda Loomis Shelley, Tallahassee lawyer
specializing in land- use law. Democrat.
Barbara Weese, Leesburg, retired teacher. AARP
advocate. Democrat.
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