Fast Focus
	Benefits brokers and consultants are ideally positioned to help clients choose programs and benefit designs that yield the best returns.
	EMPAQ allows employers to evaluate health and productivity programs through performance indicators.
	Smaller employers will be jumping on this program shortly. Brokers should not be caught off guard.

Blow Hard

Florida’s combative insurance commissioner, Kevin McCarty, sees no knockout punch from a major storm in his state’s future.

By  Ed Leefeldt

[Page 3 of 7]

What changed?

Bermuda reinsurance companies got greedy. Reinsurance rates increased 79% in 2006 and are now nearly half of every premium dollar. But that was an average figure. We saw rate increases of 400%, 500%, even 600%. Many people saw insurers as reaping profits in Florida but unwilling to take the risk that goes with it.

You faced a lot of political pressure.

You had to have been in the vortex of that political season in 2006. Nationwide, people were concerned about Iraq. Here in Florida, the No. 1 issue was homeowners insurance. Many are on fixed incomes. People went from “We pay a lot for insurance” to “I just can’t afford this.” Try telling Joe and Mary Lunchbox their insurance is now three times their mortgage payment.

But isn’t that the price you pay for living in a state that’s low-lying, bicoastal and with expensive property?

We’re not all just sipping mojitos in South Beach. Working-class people were getting hurt. Traditionally, Florida has had to fend for itself. We pay more of the premiums for flood insurance than any other state—42% of the total! So Floridians have been subsidizing the flood victims in Iowa.

So, faced with mounting pressure, you froze rates at your state-run Citizens Property and went into the reinsurance business?

That was only part of it. We also put together a quarter of a billion dollars to bring new insurance capital into our state to replace insurers who were leaving or cutting back. And we spent the same amount on the “My Safe Florida Home” program to harden our structures to resist future hurricanes and allow policyholders to qualify for discounts on their premiums.

Did this really give people a break on their homeowners insurance?

We generated and passed on savings of 16% in lower rates. That’s not as much as we had hoped, but it also helped to keep future rate increases down. For the first time in the history of this state, we reduced or stabilized the personal residential property rates.