MANATEE -- John C. Laurie, vice-president and agency manager of BB&T Insurance Services in Bradenton, has been elected the Florida Association of Insurance Agents’ 2011–2012 chairman-elect. He will become chairman of the board in September 2012.

The nonprofit agency is a state trade association of insurance agencies affiliated with the Independent Insurance Agents and Brokers of America, Inc., and 18 local boards throughout Florida.

“John’s expertise in both accounting and insurance is immediately apparent in the outstanding financial and risk management solutions he provides his community,” said agency President and Chief Executive Officer Jeff Grady. “He has been and continues to be a valued member of the insurance association, serving his fellow agents at both the local and state levels.”

Laurie, who spent the first 10 years of his career as a certified public accountant, has served on numerous FAIA committees and task forces.

We talked to Laurie about his upcoming term as chair-elect and his viewpoint on the state of Florida’s insurance industry.

What will your goals be when you begin your year as chairman of the FAIA?

We have an annual planning session in August where the volunteer leadership will come up with strategies which will be designed around advocacy of our members and consumers. We look at our mission statement and test all of our efforts against it.

A major initiative for us now is Trusted Choice, a major national branding initiative for independent agents who are competing against national insurance brands. This used to be volunteer and elective but now anyone that joins FAIA will pay for the Trusted Choice branding. We want to let people know there is another choice out there -- the independent agent. On the educational side, FAIA has partnered with the National Alliance for Insurance Education & Research to offer insurance certification programs for Florida insurance agents. This will take effect in January and is for post licensing credentials.

Are there areas of insurance regulation that need to be addressed in the state?

Yes, some of them might be perceived as minor or technical in nature while others are more important. I think we have made positive steps to get politics out of our insurance industry and go back to actuarial-based reasons. Gov. Scott and the Legislature want to attract private capital back to Florida. We’ve made some good, positive steps but there is more to do and we will address those things in the upcoming session.

There has been recent discussion on Citizens, the state-run insurance provider, being privatized. What is your position on that?

I have not seen a formal mechanism for how we would do that and how much capital it would take. I don’t know if it could be done without a large infusion of capital.

It’s a good concept, de-emphasizing the importance of Citizens but I think we will always need an insurer of last resort.

I believe they will increase significantly regardless. It is underfunded now. If a storm occurs now, we do not have adequate reserves so there would be an assessment. So the question is do you pay up front for reserves or afterwards with an assessment. Citizens was intended to be a market of last resort, we need less regulation, allowing rates to increase to market price and premiums will have to go up.

A U.S. Senate bill aimed at extending and reforming the National Flood Insurance Program has been proposed. It calls for establishing a new commission, the National Commission on Natural Catastrophe Risk Management and Insurance.

Will Florida have a role in this and what is FAIA’s stance on national catastrophic insurance?

I’m not completely familiar with the bill but historically we have been in favor of a national catastrophic or disaster insurance program. We do believe that it is important for events like hurricanes, mud slides, fires, tsunamis, to have a larger pool to fund national catastrophic events.

Why do we have so many insolvencies among insurance companies and rate increases during a time of little hurricane activity?

We’ve been in a period of rate suppression. Actuarial studies have shown that rates are too low. In 2006, legislation allowed for rates to go up 10 percent a year, but the former administration kept the cap on and didn’t allow that to happen. Now we are allowing rates to go up steadily because insurance companies can’t be competitive to Citizens’ rates.

The reason rates have been rising since 2005 is that our reserves are lower than in 2005. There has been an escalating of claims that were non catastrophic claims, and an influx in public adjustors trying to mass market to people. That has increased the amount of payout that has occurred. There were 400 claims in 2005 and 4,000 in 2011.

We are trying to close the loop hole in the replacement cost hold-back provision by allowing people only to get replacement costs when they actually replace an item.

So even though there haven’t been any hurricanes of significance, we’ve still had to pay the insurance bill, the reinsurance that insurance companies have to purchase and that money goes off shore.


Carriers are charging a premium to pay for reinsurance premiums. The global reinsurance market has had its hits and losses for things like fire and tornado damages.