on October 23, 2014 by admin in Insurance Industry, Comments (0)

‘Fangate’ Stirs Florida Insurance Industry Fears Over Gubernatorial Election

If Florida’s insurance industry was looking for any certainty about the results of the looming governor’s race between Governor Rick Scott and former Governor Charlie Crist, they didn’t find it after last week’s gubernatorial debate, which almost did not happen due to Crist’s use of an electric fan.

The race between Scott and Crist has been closely watched by the insurance industry, which has worked under the radar to try and influence the race in Scott’s favor.

With polls showing Scott and Crist virtually even, industry representatives know that the slightest incident could swing the race one way or another. That is why representatives looked on with a mixture of horror and disbelief at the beginning of the debate and the so-called “fangate” affair, which some fear could define the race.

Fla. Gov. Rick Scott

Fla. Gov. Rick Scott

In what has become fodder for late night comedians and TV political pundits, Scott initially refused to participate in the debate because Crist had a small electric fan underneath his podium.

Citing his understanding of the debate rules signed by both candidates, Scott said that no electrical devices could be used during the debate.

The issue harkened back to the 2010 governor’s debate when Scott objected to then-Democratic candidate Alex Sink ‘s use of a smart phone during a commercial break, an incident cited by some political strategists as one reason Sink lost to Scott by 60,000 votes.

This time, however, it was Scott who may have come out the worse as the debate moderators tried to explain his absence at the beginning of an hour-long debate that was being broadcast live through out the state.

Meanwhile, Crist, looking bemused behind his podium, took the opportunity to cast Scott as unreasonable saying, “Are we going to debate about a fan?”

Seven minutes late, Scott walked out onto the debate stage unannounced and said that despite his objections he would participate.

Florida Association of Insurance Agents President Jeff Grady, who was among those attending, said the fan incident created an “unbelievable” beginning to the debate and left some in the auditorium wondering if it was on purpose.

FAIA, through its Trusted Choice program, was a co-sponsor of the debate.

“Most people thought it was a joke and it was like they were waiting for the punchline,” said Grady. “But then there was no punchline.”

Professional Insurance Agents of Florida CEO Corey Mathews said that unfortunately the fan incident was a “big deal,” which on the surface exposed the different temperaments of both candidates.

“You have two very different candidates with two very different perspectives,” said Mathews. “Crist is a natural campaigner and a populist, while Scott is more focused on jobs and making a difference.”

Many in the insurance industry feel they have a lot at stake in this election and fear a victory for Crist with whom they have had their differences in the past.

Charlie Crist (AP Photo/John Raoux)

Charlie Crist
(AP Photo/John Raoux)

Now the fear is that the election could some down to a bizarre fight over a fan.

“It was really hard to watch,” said another industry onlooker. “Clearly it rattled Scott and it seemed he could never clean it up.”

Insurance did not come up during the debate but the differences between Crist and Scott can be captured in how each has approached the property insurance market, according to insurance observers.

One of Crist’s first acts as governor, following his 2006 election as a Republican, was to call a special session of the legislature as part of his pledge to lower property rates. Private insurance rates had increased following the 2004 and 2005 hurricane season, which saw eight major storms strike the state.

The resulting legislation expanded the Florida Hurricane Catastrophe Fund and froze the rates of the state-backed Citizens Property Insurance Corp., essentially making it competitive, if not a better deal, than the private market.

As a result, Citizens soon had more than one million policies.

Citizens rates stayed frozen until 2009, when the legislature implemented the so-called “glide path,” which allows annual rate increases but only up to 10 percent.

Scott, on the other hand, came into office in 2010 seeking to return Citizens to a market of last resort. That resulted in SB 408, which reversed many of the changes Crist introduced and had the strong backing of the insurance industry.

Among other things, SB 408 restricted Citizens by placing caps on coverage and revising the rules governing sinkhole claims.

Scott also charged Citizens to find ways to depopulate, paving the way for the creation of the new policy clearinghouse designed to move business out of Citizens and into the private market.

Industry insiders fear that if Crist is elected, the Citizens depopulation programs that have been seen successful will be stalled, perhaps even reversed.

In a political whitepaper issued shortly after Crist won the Democratic primary, Crist outlined his plan to reverse many of Scott’s reforms that Crist said have hurt consumers.

“During Scott’s tenure, premiums rose while the amount of coverage declined,” wrote Crist. “In other words, under Rick Scott, homeowners are paying higher premiums for less coverage.”

“Crist has been openly hostile to the insurance industry,” said PIA’s Mathews.

Grady said that the differences between Scott’s and Crist’s agendas reveal the different characters of the men.

“You have one candidate that will say anything or do anything he thinks is right for the moment. The other is more principled, not a good debater and not as polished behind a podium, but better on the facts,” said Grady. “Crist just tends to have different facts depending on which audience he is speaking before.”

The question for now, however, is whether the great “fangate” controversy will overshadow those policy differences.

A final televised debate is scheduled between the two candidates tonight (October 21).

Some industry experts downplayed the fan incident and said they don’t believe it will have any lasting effect on the election.

William Stander, president of WHISPER, Inc., an industry consulting firm, said he thought that even though the debate got off to a rocky start, Scott came out ahead by the end of the debate.

“I know the fan is providing a lot of entertainment for the political class, but I don’t think it will have an impact on the average person,” said Stander. “I thought Scott showed a command of the issues and took the fight to Crist.”

Stander said that even though polls show the race neck-and-neck, many metrics were in Scott’s favor. For example, said Stander, a large number of absentee votes have been cast, which generally favors Republicans.

Additionally, said Stander, all signs point to more Republicans than Democrats voting on election. Even so, Stander maintained that nothing could be left to chance.

“It is still a toss-up,” said Stander. “If you care about government and you are in the insurance industry you need to vote to have a say in how the state is governed.”

Article source: http://www.insurancejournal.com/news/southeast/2014/10/21/344226.htm

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