Q&A With Bill Gunter

If you need the expertise of a key figure in the history of the Florida insurance industry, look up Bill Gunter. From his beginnings as a State Farm agent in Orlando more than 40 years ago, to his public service career, to his current executive position in the private sector, Gunter has been uniquely involved in every aspect of the industry and at every level.

Gunter served in the Florida Senate from 1966 to 1972, and then in the U.S. House of Representatives until 1975. He was Florida's elected insurance commissioner from 1976 to 1989. He also served as president of the National Association of State Treasurers in 1981. In 1983, his peers elected him president of the National Association of Insurance Commissioners. In 1988, the National Insurance Consumers Organization named him the “Most Effective Insurance Commissioner in the United States.” He currently is chairman of the board of Rogers, Gunter, Vaughn Insurance, Inc., a Tallahassee-based independent insurance agency, and recently began his term as chairman of the Florida Association of Insurance Agents (FAIA).

It is in his volunteer position at FAIA that Gunter spoke with Florida Underwriter, outlining the group's platform, agenda, challenges, and future.

Q. FAIA endorsed CFO Alex Sink for governor early on. How did she earn that confidence from your members so quickly and decisively?

A. Due to the reorganization of the Cabinet, which resulted in the insurance commissioner being appointed versus elected, a portion of FAIA's involvement with government is now at the Cabinet level. For example, the governor and CFO must agree on the appointment of the insurance commissioner, who is largely responsible for what happens in Florida's marketplace, and who reports on various issues at every Cabinet meeting and is directed by the Cabinet.

FAIA's board and executive staff interviewed CFO Sink and all the other candidates when she first ran for elective office as Florida's Chief Financial Officer. We were impressed enough then to support her over all the other incumbent officials and experienced politicians. Our instincts were right on target. She has since proven her capabilities time and time again as a regulator of insurance and insurance agents, and is largely recognized as a conservative voice of reason when it comes to insurance issues. Besides, she's going to win!

Q. At FAIA's summer convention, you mentioned combating ways in which federal actions impact agents' livelihoods by doing more federal advocacy. What will that advocacy look like?

A. Well, the most visible effort currently underway is the advocacy work the Independent Insurance Agents and Brokers of America (IIABA) and FAIA have delivered during the health-care reform deliberations in Washington. You may recall FAIA was a leader in the recent Health-Care Reform Agent Fly-in that included more than 1,000 agents from around the country. There obviously is still much work to do to ensure that agents remain a part of the delivery system, and I believe our work thus far has been invaluable to accomplishing this goal. Congress and the administration will debate proposals that call for federal regulation of insurance, licensing reform, natural disaster legislation, and the like. FAIA has well-established positions on all of these fronts, and we will continue to partner with IIABA to advance them further.

Q. Will this advocacy effort change any of the ways FAIA's PACs are now used?

A. No, FAIA's PACs are authorized only for state offices, not congressional offices. Our national association, IIABA, uses INSURPAC contributions from agents and brokers for the U.S. congressional races that impact Florida and other states.

Q. Mitigation and homeowners' premium credits were a major topic at FAIA's planning session in August. How serious is fraud at the retail level? Your web site discusses property carriers' frustration over inflated mitigation credits that yield dangerously low final premiums on homes that often may not deserve any credit at all. How has this evolved, and what can be done?

A. First, everyone should read FAIA's white paper available at www.faia.com. It answers this question better than I ever could. But the sword that is chasing capital from the state of Florida has two edges: one, rate suppression; and two, inflated mitigation credits. The latter is particularly regrettable because homeowners not only think their homes are safer than they really are, but they do not implement the upgrades necessary to harden our housing stock to a level that would enable Florida to self-sustain the impact of a mega-storm. Of course, unsafe homes mean lives will be lost, people will be injured, and families will be displaced, when it could have been avoided if the OIR had simply implemented the scientifically indicated mitigation credits. I am hopeful that the Hurricane Methodology Commission will address these issues, and lawmakers will implement meaningful reform during the 2010 session.

Q. What help has come out of the Florida Catastrophic Storm Risk Management Center at Florida State University's College of Business since its start in 2007? Do you see the center as a partner-in-the-trenches or more of an academic center?

A. I see the center as an invaluable resource for all the entities — private and public — that need objective, non-political information regarding hurricanes and mitigation and the impact of both on the lives and livelihoods of all Floridians. The center provides support for any entity in preparing for, responding to, or recovering from catastrophic storms. One benefit for agents is that anyone looking for data and information on Florida's hurricanes and subsequent insurance crisis can find it all at www.stormrisk.org. Particularly interesting, for example, is an overview of Florida's premium subsidies, the groups who benefit and the groups who pay, and the unintended consequences on our insurance marketplace. I find it helpful when I am looking for an analysis of assessment procedures for Citizens, the Cat Fund, and FIGA, for example. Anyone who would like to know more about what is going on in Florida in connection with this subject area should visit the web site.

Q. You have mentioned being in favor of implementing new communication models, using social networks, blogs and Twitter. Will you gear those efforts internally or use them to attract more members? How tough might that be in an industry that took its time getting to the electronic worktable?

A. I believe FAIA will have to lead agents to the table on this one. We are not as automated as we need to be, and we need to do a better job of competing with Internet-based sellers and adapting to new technology. Even before our planning meeting, FAIA had begun establishing social networking communities based on its governance structure and for each of its interest areas. Ultimately, this will be the preferred method of learning and communicating with member agents. It is instantaneous, it is free of any spam, and each person selects only those areas in which he or she wishes to participate. FAIA will be exchanging ideas and information with its members in the most efficient way imaginable, in my opinion. This will set the stage for agents to become more adept at using similar modalities for communicating with their customers and prospects.

FAIA is also heavily involved in continuing education through Webinars. This approach will allow live FAIA instructors to teach thousands of agents who won't have to leave their desks or spend time and money traveling to a hotel. It is the wave of the future, and considering the economy, it couldn't come at a more opportune time.

Q. You have questioned the efficacy of dues structures in organizations such as FAIA. What ideas for improvement do you have? Is fee-for-service on your list of things to discuss?

A. Frankly, we are looking at changing from an agency-revenue basis to a headcount approach. Most other state agents' associations use this approach, as does our national association, and it seems to work well. Our goal is not to bring in more revenues, just to be more fair and make the system more verifiable. We expect a task force report to the members prior to our dues billing cycle in 2010. Also, part of the report will address possible bundling of services. For example, should an agency be able to purchase a certain number of CE hours as part of its dues payment, and in doing so, receive a reduction in overall price? As we move forward, the Trusted Choice branding initiative will also be a component. It is, as you know, becoming recognizable across the U.S. and is, in my opinion, a worthy effort. But advertising is expensive, and to make the initiative all it can be, we are looking at ways to bring more dollars to the table. This could include something called the “all-in” approach where everyone is a Trusted Choice agent, and the price is included in our dues. Current Trusted Choice agents would pay less, and those who are not members would pay more, but receive substantial benefits from the branding. I believe it is time independent agents increased our recognition in the public eye, and the Trusted Choice branding initiative is the way to do that.

Q. Anything else unique and promising up your sleeve?

A. Perhaps not unique, but certainly promising is my strong belief that whatever is in the best interests of the insurance consumer is also in the long-range best interests of our industry. I have held tightly to that conviction throughout my career, and I look forward during my service as FAIA chairman to some teachable moments and opportunities to remind my agent and broker colleagues of this principle. I think the FAIA mission statement best captures this fundamental truth: “To serve the needs of Florida insurance agents and consumers by promoting a healthy and competitive insurance environment.” I truly hope that my leadership efforts as chairman will add more momentum and sense of purpose to our association's agenda in the year ahead.