Two of the nation’s largest, and most troubled, residual market property insurers have announced new leaders this week, as Florida’s Citizens Property Insurance Corp. picks a new president and the Texas Windstorm Insurance Association makes their interim general manager permanent.
Citizens will be led, on at least an interim basis, by Tom Grady, who announced who would step down from his current post as commissioner of the Florida Office of Financial Regulation to take the job. The FLOFR is a sister office to the Florida Office of Insurance Regulation within Florida’s Department of Financial Services.
Grady was chosen unanimously in a March 5 vote of Citizens’ board of governors and will assume his position March 12. He succeeds Scott Wallace, who announced in January that he would step down after six years helming the state-run insurer. According to Sunshine State News, Gov. Rick Scott’s office said Grady would serve as interim president and would have the opportunity to apply for the post permanently.
Despite serving on the transition teams of both former Gov. Charlie Crist and former state Attorney General Bill McCollum after the 2006 elections (neither of them exactly friends of Citizens reform) Grady is known to be a close associate of Gov. Rick Scott, his predecessor as chairman of Properity Florida. The two are also neighbors, and Scott served as Grady’s campaign finance chairman when the latter was a member of the state House, representing parts of Collier County. During his single term in office, Grady served as vice chairman of the Insurance, Business and Financial Affairs Committee.
Grady noted in Citizens’ statement his commitment to the goals of reducing the risks faced by CPIC and avoiding the need to lay assessments on private insurance policies following a storm:
I applaud the board’s courage and initiatives, and share their goals. Florida’s economic recovery depends upon sound risk management decisions, and clarity for Florida’s employers. I am honored to be asked by Chairman Lacasa and the entire board to sustain and build on their momentum, while operating a first class insurance company for our policyholders.
At TWIA, John Polak, who has served since April 2011 as interim general manager, was announced as the permanent successor to Jim Oliver. Oliver was fired in March 2011 after 11 years leading the association, amid an investigation into TWIA mismanagement of claims following 2008’s Hurricane Ike that ultimately cost the association more than $140 million in legal settlements. Oliver filed a suit in September 2011 accusing TWIA withholding his severance pay.
Polak is a veteran insurance executive, serving most recently as vice president of specialty and affinity markets at Ohio-based National Interstate Insurance Co. His previous posts included 11 years as president and CEO of the Argonaut Group’s Argonaut Great Central unit; executive vice president in CNA Financial’s personal lines business; and positions with Trinity Universal, Republic Indemnity and 21 years with The Hartford, where he got his start in the industry.
In a July 2011 interview with the Houston Chronicle, Polak said his goal was to change the culture at TWIA (which is embarking on a restructuring effort called for by Insurance Commissioner Eleanor Kitzman) but declined to say how long into the future the association might need to continue raising rates:
That’s a question for the board. That’s a decision they made that they felt they were better off taking smaller bites at the apple year after year. As the indications (of needed rates) are shrinking, it would indicate they are making progress. To the extent that they are growing, it would indicate they are not.