If he has a rubber stamp, Bruce Douglas doesn't intend to use it. Not this time.
Douglas, chairman of Citizens Property Insurance Corp.'s board of governors, said he wants to block a proposed rate hike that could double some homeowner policy premiums.
In an interview with the Times Wednesday, Douglas said he will recommend the board ask the state to eliminate legislation passed last spring that would force the state-run Citizens to raise its rates in many areas by a statewide average 55.8 percent beginning early next year. Citizens, which insures property owners who can't find coverage in the open market, has swelled to cover one in every three homeowners.
The Citizens board meets Dec. 7 in Gainesville to consider the rate hike, an increase mandated by Senate Bill 1980, an insurance reform act passed last May by the state Legislature.
That increase, which is based on a requirement that Citizens do something it has no plans to - buy expensive private reinsurance - would be on top of a 25.9 percent rate hike already set to take effect Jan. 1.
"I have no dog in the fight except to represent the policyholders," Douglas said. "I would recommend the board members deny the implementation of that part of Senate Bill 1980, or eliminate the requirement that the cost of reinsurance be included in that filing."
If nothing else, what Douglas proposes could buy some much-needed time for Citizens' 1.3-million policyholders already grappling with huge premiums. If approved, the new rates would go into effect March 1.
But Douglas and others point to strong indications a special legislative session will be called before that to deal with the insurance crisis, most likely in January. The 2007 regular session begins March 6.
Douglas, 72, is largely responsible for steering the ship that is not only the largest property insurer in Florida, but the fourth-largest in the nation. Citizens usually sets its own rates, subject to state approval, but SB 1980 changed that with the reinsurance provision.
And when the corresponding numbers were announced last week, the public outcry was deafening.
The latest rate hike, if approved by the Citizens board and state regulators, would affect about 400,000 of Citizens' coastal homeowners who have wind-only coverage. Mobile home policyholders would see a 103.7 percent increase.
The remaining 700,000 Citizens customers who have multi-peril policies face smaller increases, up to 8.5-percent on homes, 27.6-percent for condo residents, and 19.4 percent for mobile home owners.
Some homeowners in coastal Pinellas could see rate hikes of as much as 97.4-percent.
In the meantime, Douglas, who was appointed to the board by outgoing Chief Financial Officer Tom Gallagher in 2002 and has served as its unpaid chair since July, 2005, is struggling under the weight of a company that took in 55,000 new polices last month and has a staff of just 750.
Douglas said he didn't discover the finer points of the legislation until the day after it was passed.
"My initial reaction was that it was an honest, good effort," Douglas said. "But because of the timing, I don't think a lot of people had an opportunity to run the numbers through 2007 to see the total effect."
Surplus for Citizens
Douglas said he knew rates would have to rise because Citizens' loss exposure is approaching $400-billion and growing by the day.
"But the economic impact the (new) rates would have, and the tenuous nature of the economy as these rates are implemented, has caused me to step back and say the economics cannot absorb this March 1 rate. And that, hopefully, something will be done to alleviate this situation."
The thinking behind SB 1980, Douglas said, was to create a surplus for Citizens. But he added, "A lot people don't look at it that way.'
Included among them are legions of homeowners and consumer advocates, many of whom see the rate hike as a backhanded way for private insurers to raise their own rates.
Douglas also said he has met with a number of legislators who share his view. He suggests that the Florida Office of Insurance Regulation, not the Legislature, set Citizens' rates.
As for building reserves, Douglas advocates allowing Citizens to write an entire homeowner policy, including fire and theft, which would bring in more money without similar risk.
'I'm sure they'll act'
Before anything else, Douglas said, the March rate increase must be eliminated.
When that could happen is uncertain, but pressure is building to act soon.
Senate President Ken Pruitt, R-Port St. Lucie, told Senate staff Wednesday that lawmakers may hold a special session in January to address the property insurance crisis.
Incoming Gov. Charlie Crist could call the Legislature into session in January, or Pruitt and House Speaker Marco Rubio, R-Coral Gables, could lead a move to have lawmakers vote to call themselves into session.
"I think the Legislature is in agreement these rates are No. 1 on their table," Douglas said. "I'm sure they'll act on that."