A private insurance executive with four decades of experience was chosen Wednesday to lead Florida’s state-backed Citizens Property Insurance Corp.
Citizens’ governing board selected Barry J. Gilway, 66, largely on the strength of his career in the private sector. He is president and chief executive officer of Seattle-based Mattei Insurance Services.
Citizens has grown to become the largest property insurer in Florida with more than 1.4 million policyholders. The threat of hurricanes has scared off many private insurance companies while others in many cases have raised premiums higher than homeowners and businesses are willing to pay.
Gov. Rick Scott and other politicians want to shrink Citizens, increase its revenues and grow the private sector.
“If I’m trying to get private companies to take up Citizens’ policies in a depopulation strategy, I need to know what their business models require and what their reinsurance needs are in order to successfully pull that off,” said board chairman Carlos Lacasa. “From this perspective, Barry Gilway is a great choice.”
Scott said he was looking forward to working with Gilway and the Citizens board to reduce risk by moving polices to those private companies will to accept them.
“No matter how you crunch numbers, the experts acknowledge that Citizens has grown too big, and doesn’t have enough money to cover its policyholders in the case of a major hurricane, let alone the risk of getting hit more than once this season,” Scott said in a statement.
He noted nearly every insurance customer in the state, including those who only have automobile policies, would get a special assessment to help Citizens pay losses in excess of its assets.
A second finalist from the original field of 70 candidates was Glenn Pomeroy, a former Democratic state legislator from North Dakota who presently serves as the chief executive officer of the California Earthquake Authority.
Gilway said the couple was planning to move to the Jacksonville area even before he applied for the Citizens position. Citizens has an office in Jacksonville but is headquartered in Tallahassee. The job pays about $350,000 a year.
The board questioned both finalists for roughly an hour.
The Chicago-based global executive search firm Heidrick Struggles assisted Citizens in its nationwide search.
Citizens’ interim president, Tom Grady, also a former Republican lawmaker, was not among the final candidates but said he would stay on as long as needed.
“I would like to assist in any way I can in the transition,” Grady told the board. “Barry will be a great CEO for this organization.”
A motion by board member John Wortman of Jacksonville to include Grady in Wednesday’s final round of interviews failed to get a second after Lacasa noted the two finalists were the search committee’s clear favorites.
The state’s Office of Insurance Regulation was quick to praise Gilway’s selection, saying his experience and understanding of the private market will be critical to reducing its exposure.
Gilway was born in Britain and came to the U.S. at 14. He spent a year in Vietnam in 1969-70 as an Army platoon sergeant. Gilway earned a degree in industrial management from Akron University and later graduated from the executive program at Stanford University’s business school.
The board will have a workshop on its rates in Miami on July 16 with a decision expected at its July 27 meeting. It is considering a proposal that would increase premiums for new customers far in excess of a 10 percent cap set by state law. Advocates of that strategy argue the limit applies only to existing policies.
Lacasa, though, cautioned his colleagues last month about potential blowback from lawmakers if the board exceeds the cap without hearing what they have to say about the idea. He noted that state regulators approved a 32.8 percent increase after Citizens asked for a hike of more than 400 percent on sinkhole policies, which drew objections from legislators.
Citizens was created as the insurer of last resort for residents who could no longer get coverage from private companies.
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