Florida Agents, Residents on the Rise

With both agents and residents flocking to Florida, the Sunshine State is on the move. Florida Chief Financial Officer Tom Gallagher, who oversees insurance matters in the state, recently set aside time to talk with Insurance Journal Southeast regarding some of the issues impacting the state.

Gallagher’s life in public service began in 1974 when he was elected to the Florida House of Representatives. He served for 13 years in the House, seven of which were spent as the only Republican from the Miami-Dade delegation.

In 1987, Governor Bob Martinez appointed him Secretary of the Department of Professional Regulation, and in 1988, he was first elected to the Cabinet position of state treasurer, insurance commissioner and fire marshal. As insurance commissioner, Gallagher is best known for his leadership in the aftermath of the nation’s most devastating and costly natural disaster – Hurricane Andrew. Also during his tenure, Gallagher spearheaded the creation of the Healthy Kids Corporation, a program that offers health insurance to more than 500,000 uninsured children in Florida.

After serving as education commissioner from 1998-2000, Gallagher was again elected state treasurer in November 2000.

In 2003, Gallagher was sworn in as Florida’s first Chief Financial Officer. Gallagher persuaded lawmakers to enact legislation putting an end to predatory rating practices used by out-of-state health insurance companies. Gallagher also successfully pushed for increased penalties for individuals and businesses selling unlicensed insurance or committing workers’ compensation fraud.

Insurance Journal: How would you describe the current property/casualty market for independent agents in Florida?
Gallagher: Most of Florida’s property/casualty agents are independent, holding an average of seven carrier appointments. Over the last 10 years, we have seen the number of property/casualty agents’ double from approximately 30,000 to more than 60,000. Florida has continued to experience economic growth and tremendous population growth, even during recent economic downturns. With new homes being purchased and new businesses being opened, the need for insurance protection continues, creating a bright outlook for independent property/casualty agents. The challenge for insurance regulators is to look for ways to ensure the affordability and availability of coverage for Floridians.

IJ: Talk a little bit about the problem of insurance fraud, its costs in Florida and what the department is doing to combat it
Gallagher: It is estimated that insurance fraud costs the average Florida family as much as $1,400 a year in higher premiums and higher costs for goods and services. Employers are finding it increasingly difficult to afford coverage for their workers, including the required workers’ compensation coverage. And more Floridians than ever are driving uninsured. We all pay for insurance fraud, and that is why in Florida we offer to pay for information that can help us stop the most complex fraud schemes – up to a $25,000 reward. This year, a prosecutor’s position was created to specifically address the growing problem of Personal Injury Protection (PIP) fraud. The department coordinates with local, state, and federal law enforcement agencies and our insurance fraud hotline, 1-(800) 378-0445, is listed in every fraud-related press release, on billboards and in all public service announcements. I’m also proud to announce that for the past several years, Florida has led the nation in the number of insurance fraud arrests and convictions.

IJ: How did the department respond to help businesses and individuals with storms and other catastrophes that hit the state in the last year?

Editor’s note: To see the full interview, see the March 22 issue of Insurance Journal Southeast. For more information on this magazine, which contains news for independent agents in Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, Tennessee and West Virginia, visit www.insurancejournal.com/subscribe.