Bull from the Pulpit

Veni, vidi, blateri.
(Loose translation: 'I came, I saw, I talked a lot.')

State Chief Financial Officer Tom Gallagher spent the last two days in Pensacola getting an earful from local residents, thousands of whom are still living in extremis almost six months after Hurricane Ivan.

Paige St. John filed this dispatch after the first day, appropriately titled Gallagher Rails Against Insurers:

"Gallagher spoke out after attending an emotional town hall meeting Wednesday in Pensacola that drew nearly 1,000 unhappy storm victims. A second meeting was called for Thursday, and three more sessions are planned in Sebastian, Punta Gorda and Orlando."

In mid-visit, St. John writes, Gallagher summarized the "unconscionable" insurance practices he was discovering --

• Insurers failing to show for state-ordered mediation with policyholders.
• Other companies sending representatives who can't pay.
• Some sending victims partial settlements mislabeled as "final payment."

"Those (practices) are unconscionable," Gallagher said. "I think it's time we start exposing to the public what companies are the worst in regard to taking care of their customers."

To his credit, Gallagher singled out Citizens Property Insurance for special criticism:

"The worst problems are in Escambia County... and among the worst offenders is the state-run Citizens Property Insurance."

According to St. John, Gallagher orally urged Citizens to "drop its lawsuit against an Escambia County couple and make payments on the undisputed portions of hundreds of hurricane claims being held up by the litigation."

He's right, of course. The test suit Citizens filed against the Perkins family from the Perdido Key area is an outrage. In suing their own customers, Citizens has taken the low road of flouting Florida statutory and case law, apparently hoping to delay insurance pay-outs for years while the case is appealed and industry lobbyists log-roll the legislature to change the law. Meanwhile, Citizens is using that lawsuit as an excuse to stiff-arm thousands of its other policyholders who, like the Perkins, have the audacity to claim damage from the twin hurricane casualties of wind and water.

Gallagher may talk a good game, but as yet there is no sign he plans to take any meaningful action. Indeed, his chief lawyer, Pete Dunbar, imprudently confessed to St. John:

"This is all about the bully pulpit. * * * It's part cajole, part kick, part talk to Kevin (McCarty, Florida's insurance commissioner)."

Public 'exposure' of irresponsible or incompetent insurance companies is useful, of course. It can help potential customers entering the marketplace to avoid signing up with a bad company, like First Protective Insurance, Capitol Preferred, Vanguard Fire & Casualty, or Universal Property & Casualty -- all of whom Gallagher also singled out for a tongue-lashing.

But when it comes to existing customers of companies like the state-owned Citizens Property Insurance, it's hard to imagine what good can come of 'cajoling' from Gallagher's "bully pulpit." Seeing the head of all of Florida's Financial Services claim that he can do nothing more than "talk" to Citizens is like watching Worldcom's munificently-paid CEO, Bernie Ebbers, tell the jury he's never been able to add or subtract. To both men, one wants to scream "Then why in hell should you be the boss?"

Other than palaver, attorney Dunbar told St. John, "I don't know what else you do but get out there and roll up your sleeves." Dunbar is not a licensed contractor, so even if he rolls up his sleeves he won't be able to repair a single roof or replace a ruined home. But what he and his boss can do, if they really want to help, is use the lawful powers granted to Gallagher's office under the state law that created the Department of Financial Services in the first place:

(a) The department or office may issue and serve a complaint stating charges upon any licensee or upon any affiliated party, whenever the department or office has reasonable cause to believe that the person or individual named therein is engaging in or has engaged in conduct that * * * constitutes ... a detriment to policyholders... or the public * * * Whenever the department or office finds that conduct ... is likely to cause... substantial inability to pay claims on a timely basis, or substantial prejudice to prospective or existing insureds, policyholders, subscribers, or the public, it may issue an emergency cease and desist order requiring the licensee or any affiliated party to immediately cease and desist from engaging in the conduct complained of and to take corrective and remedial action."
-- Florida Statutes section 624.310

Gallagher may have convinced some in Northwest Florida that he feels their pain. But what policyholders really need is a Chief Financial Officer who will invoke the powers of his office to inflict a little pain on Citizens Property Corp. and force "corrective" action.