In retrospect, 2005 probably will be viewed as a transitionalyear. The once-strident legislative battles over medicalmalpractice and workers' compensation reforms have given way to aperiod of assessing their incremental changes on the markets. Thenthere is the fact that the state has suffered eight hurricanes intwo years, leaving a financial and economic legacy that willrequire legislative and regulatory action stretching forwardindefinitely. That is not to say that 2006 will be without itschallenges. The fight over whether to retain the auto personalinjury protection law is already heating up as the industry linesup against its old foes — the trial bar and doctors. CitizensProperty Insurance Corporation is due for a major overhaul giventhe residual market's many financial and ethical problems. And thenthere will be the long discussion over who should pay for Florida'scoastal hurricane losses. Throw in the fact that 2006 is anelection year, and that Chief Financial Officer Tom Gallagher isrunning for governor, and there is plenty to look forward to. Butfor the moment, Florida Underwriter looks back. Here are a fewquotes that caught our attention this past year.

Workers' Compensation

“These are the results we had hoped the reforms would produceand while we are not totally out of the woods, we have come a longway from where we started.” – Insurance Commissioner Kevin McCarty,on his decision to lower rates by 5.1 percent in January 2005.

“It speaks volumes when carriers choose to come into the marketbecause they believe they can come to Florida and make a profit.” –David Hoppen, senior vice president of the Insurance Company of theWest, noting that new companies are willing to come into the marketdue to the 2003 reforms.

“Clearly there is a risk of getting caught cheating. We aregetting calls every day from agents looking for coverage forcontractors looking to comply with the law.” – Tom Stahl, executivedirector of FUBA Workers' Comp, on the impact of the newconstruction exemption laws.

“Now may be the best time for a glitch bill and we are not goingto just walk away. But this conference is indicative of all thepeople involved in [workers'] comp and it is difficult to get aconsensus from even half of this group.” – House InsuranceCommittee Chair Dennis Ross (R-Lakeland), speaking at the annualFlorida Workers' Compensation Institute Annual Conference, on thechanges for comp reform in 2006.

“A 22 percent rate cut is divorced from reality. If [McCarty]were to approve that change, all the good progress we've seen overthe last several years would dissolve.” – William Stander,representing the Property Casualty Insurers Association, on ChiefFinancial Officer Tom Gallagher's call for a 22 percent rate cut.McCarty approved a 13.5 percent rate cut that will take effect inJanuary 2006.

Hurricanes

“Because of the financial devastation these people havesuffered, they may not be able to rebuild or repair their homes.The consequence of such a scenario could be financially devastatingto the economy of this state.” – Tom Gallagher, on his successfuleffort to convince lawmakers to limit homeowners' hurricanedeductibles to one per season.

“Companies were bidding for adjusters and paying $2,500 and$3,000 up-front.” – Charles Cramer, of the adjusting company CJW,on the cost of finding adjusters.

“I don't want to sound cold, but nothing that occurred surprisedme. This has been modeled for decades.” – Rade Musulin, vicepresident and actuary for the Florida Farm Bureau, commenting onthe flooding of New Orleans after Hurricane Katrina.

“There is the potential doomsday scenario. In Florida, we havedone all we can responsibly. What we need is a national programthat doesn't write the checks after the fact, but is an advancedplan.” – Kevin McCarty, joining the chorus of regulators andlawmakers on the need for a national catastrophe fund.

Citizens Property Insurance Corporation

“The CFO believes that one key to improving Citizens ismotivating agents by providing them with adequate commissions andthat can't be done on the cheap. He also is looking forward toagents becoming a crucial part of providing and raising the servicelevels in the residual market to equal those in the privatemarket.” – Bob Lotane, spokesperson for Gallagher, on why the CFOsupported agents in their fight to increase commissions.

“It makes no sense that, when the agent knows the person and hishouse, the policyholder should have to wait three weeks to get acheck. As an agent you are the company, and when there is acatastrophe, it is highly appropriate that an agent have limiteddrafting authority to issue ALE checks.” – Florida Association ofInsurance Agents Executive Vice President Scott Johnson, on why itwould make sense for Citizens' agents to process additional livingexpense checks.

Sinkholes

“Sinkholes are affecting the availability and affordability ofhomeowners' policies in the West Central portion of Florida andhave caused a significant increase in the population of CitizensProperty Insurance Company” – Kevin McCarty, on carriers' decisionsto pullback from sinkhole areas.

“A sound answer is to set up a system where real experts areinvolved in determining whether a sinkhole exists and how to fixit. Then, give the experts' determinations a presumption ofcorrectness.” – Mark Delegal, lobbyist for State Farm, on what itwould take for carriers to consider writing policies in sinkhole-prone areas.

Auto

“There is a tremendous amount of attorney involvement and it iseasy for claimants to sue companies. When people think aboutwhether we should go to a tort system, there is an argument thatthat's what it already is.” – Stander, on the prospect of doingaway with no-fault.

“We don't tell insurance companies where to set rates.” – JohnKnight, of the Florida Medical Association, making the argumentabout why there doesn't need to be a medical fee schedule inPIP.

Health

“The amendments have been absolutely eviscerated, gutted. Thisis not anywhere close to what the voters of Florida voted for.” –Alexander Clem, an Orlando attorney and president of the FloridaAcademy of Trial Lawyers, on the legislature's decision to limitthe scope of two medical malpractice amendments, including apatient's access to medical records.

“We get calls to our toll-free number everyday from people whocan't find health insurance. These people are willing to pay higherpremiums, but can't find anybody willing to write them. I think thepool is desperately needed.” – Michele Robleto, executive directorof the Florida Comprehensive Health Association, on the continuedfrustration of trying to get lawmakers to reopen the high-riskpool.

“Health Flex has gone over like a lead balloon.” – Paul Duncan,a health policy expert at the University of Florida, who chairs thestate Health Insurance Study Advisory Panel. Health Flex allowsinsurers, hospitals, and other entities to offer health insuranceto the uninsured without some or all of the 51 state and federalmandated benefits. No health insurer has stepped up willing tooffer a statewide “bare-bones” type policy.