This month's Florida Underwriter is an exceptionally diverse collection of good news, bad news, reflections, prognostications, and fierce opinions. Our page 8 cover story on workers' compensation by Thomas J. Maida and Leonard Schulte of Foley & Lardner takes us back to the pre-2003 reform days, brings us up to present day, and then catapults us forward to the 2011 legislative session. Workers' compensation is one of our more dependable cyclical markets — about every decade somebody decides it needs shaken up. Will lawmakers decide 2011 is ripe for reform?

Our special report from the Florida Surplus Lines Association offers opinions, market evaluations, regulatory insight, and a salute to one of our most enduring and endearing industry leaders upon her retirement; see pages S-1 through S-16.

Lynne McChristian of the Insurance Information Institute reminds us that even good financial news can be used against us. The problem: The public reads "surplus" in the P&C industry's latest financial reports, and thinks "slush fund." She explains how to change that bad perception into a positive reality on page 14.

Chris Ginakes, a public sector manager for Colonial Life, finds the silver lining in the health-care reform cloud. "Although the legislation creates lots of changes for employers and the medical insurance they offer employees, experts predict the impact on voluntary benefits to be minimal," he writes on page 10. "That is good news for everyone, but it is an especially welcoming message for major medical brokers looking for new sources of revenue." His feature reminds us that insurance agents and brokers are traditionally "glass half full" people.

Editorial Board Member and Florida Association of Insurance Agents President Jeff Grady writes hopefully of the dawn of a "different day" in his "Inside View" on page 22. "Most notable is a wholesale change coming in Florida's political landscape that simply has to be better than the populist crusade led against the insurance industry by Gov. Charlie Crist," Grady says. "The dismal shape of Florida's private property insurance market demands this new reality." Amen to that.

Which leads me to Contributing Editor Gary Fineout's "Capital Report" on page 17.

Last month I told you that Fineout and I had invited gubernatorial candidates Alex Sink and Rick Scott to participate in a Q&A focusing on insurance, with responses to be published in this issue. Both candidates accepted the invitation, and our dozen or so questions were dutifully e-mailed to them weeks in advance. All appeared to be going smoothly until the deadline neared — and then passed — with no word from either candidate. Numerous e-mails, phone calls, and deadline extensions ensued. Eventually, Sink and Scott both sent us letters outlining various aspects of their insurance platforms while declining to respond to the more formalized Q&A format.

What should we make of this? Have we morphed so totally into senseless sound bites that written, well-reasoned responses to submitted questions are considered poisonous to a campaign? Or were our questions too controversial? Just too darn complicated? Judge for yourself. I am publishing them online in an extended "From the Editor" at floridaunderwriter.com. Let me know what you think.

Given the economic and social importance of our products, the insurance industry — particularly property coverage — will (or should) have a prominent place on the governor's agenda. Gov. Crist made his views on our industry very clear. We didn't like them, but at least we knew what they were.

I encourage you to read "Capital Report," which weaves the candidate's letters to us and their previously stated platforms into a snapshot of their positions on various aspects of our industry. When you compare the article with our questions you will see many common threads, which makes me wonder all the more what Sink and Scott were so worried about.

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QUESTIONS FROM FLORIDA UNDERWRITER MAGAZINE FOR
GUBERNATORIAL CANDIDATES ALEX SINK AND RICK SCOTT

1. Would you have signed SB 2044, the comprehensive property insurance legislation from the 2010 session that includes limits on filing claims and would have allowed for limited rate hikes for such things as reinsurance or inflation? If not, are there any specific measure contained in the bill that you do support?

2. If you are elected governor will you call for a vote on whether to reconfirm the current commissioner of the Office of Insurance Regulation? If so, how will you vote?

3. Do you think the regulation of insurance should be controlled by an elected or an appointed official? Why or why not?

4. On Rick Scott's web site, he says, "Lower workers' compensation costs; a 35% reduction in workers' compensation costs would save businesses approximately $2.46 billion."

For Candidates Sink and Chiles: Do you think workers' compensation rates should be reduced 35% from current levels?
For Candidate Scott: Explain why you think workers' compensation policies are overpriced.

5. Do you think that the state should provide its own form of reinsurance as it does now with the Florida Hurricane Catastrophe Fund? Why or why not? If you do support a state-created reinsurance fund, do you believe that all types of insurance policies, including medical malpractice policies, should be assessable?

6. Florida's property insurance market is dominated by an assessable entity — Citizens Property Insurance Corp. This so-called "market of last resort" offers pricing and all other wind deductibles that, in many instances, can't be touched by the private markets. The commercial policy deductibles, in particular, are so low they provide a huge incentive for commercial risks to stay in Citizens. What is your plan to get us back to a property market dominated by non-assessable policies?

7. If you become governor would you support the creation of a health insurance exchange, or would you have Florida citizens rely on a federal one? Why or why not?

8. Do you support or oppose Amendment 9, the constitutional amendment that would ban an individual health insurance mandate?

9. If you do not support the federal health-care reform bill, what would you do to lower the number of uninsureds in Florida?

10. Would you support a bill that would prohibit the use of credit scores when determining rates for auto insurance? Why or why not?

11. Do you think the state should place some mandates on health insurance policies to require certain types of coverage or do you think that health insurers should be able to offer whatever type of coverage they wish? Please explain.

12. Do you believe that health insurers should be required to follow medical loss ratios or to spend a certain percentage on direct patient care?

Special Reports /

A 360 Degree View of Florida's Insurance Industry

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