After Florida lawmakers made changes in the insurance system that he described as “historic,” Citizens Property Insurance Corp. President and CEO Barry Gilway said Thursday he will retire.
The Citizens Board of Governors named Tim Cerio, the state-backed insurer’s general counsel, to serve as interim president and CEO. Gilway did not give an exact date when he will leave the post, but Citizens Chairman Carlos Beruff plans to negotiate an agreement in which Gilway would play a consulting-type role.
Board members praised Gilway during a remote meeting, with Beruff pointing to Gilway’s “intelligence and tenacity.”
“It is a huge loss for us,” board member JoAnne Leznoff said.
Gilway, who said he had been in the insurance business for 52 years, became president and CEO in June 2012. During the past two years, he has led Citizens through a tumultuous period in the property-insurance market, with Citizens seeing its policy count soar to 1.14 million as private carriers dropped policies and raised rates because of financial losses.
Lawmakers during a special legislative session last week passed major changes that Gilway backed, including taking steps to curb lawsuits against insurers and to try to push policies out of Citizens into the private market.
“This is historic legislation that addresses so many critical issues that have plagued the Florida market for many years,” Gilway said last week.
Citizens board member Charlie Lydecker, an insurance executive, described Gilway as a “hell of a leader” and pointed to his role in helping get the changes passed.
“It was Barry Gilway’s leadership and thought leadership that guided the Legislature towards really making some changes that we hope to be systemic, long-term and help stabilize the Florida property marketplace,” Lydecker said.
Thursday’s announcement came a week after state Insurance Commissioner David Altmaier said he is resigning effective Dec. 28. That will lead to transitions at two of the most important parts of the Florida insurance industry.
Cerio will take over as interim president after Beruff finishes negotiations with Gilway. Cerio has long been an influential player in Tallahassee, including serving as general counsel to former Gov. Rick Scott and chief of staff at the Florida Department of Health. Cerio, who serves on the state university system’s Board of Governors, became Citizens general counsel in June 2021.
The Citizens board did not discuss details of a potential search for a new president and CEO.
“I think it’s important that we adequately explore options,” board member Nelson Telemaco said. “I also have confidence in Mr. Cerio’s ability to lead the charge in the interim, but we do need to at some point discuss adequate exploration of candidates and make sure that the future is in good hands.”
Citizens was created as an insurer of last resort, and its operations are heavily affected by the financial health of private insurers.
When Gilway took over in June 2012, Citizens had 1.44 million policies. But with an improved market and efforts to shift policies away from Citizens, the state-backed insurer had as few as 419,475 policies in October 2019, according to data posted on its website.
During the past two years, however, Citizens has seen explosive growth amid broad troubles in the industry. In November 2020, for example, it had 532,788 policies. As of last week, it had 1.14 million.
Gilway, whose previous experience included serving as CEO of two private insurers, has long pointed to litigation as causing many of the industry’s problems in Florida. Lawmakers last week made a series of changes to try to reduce litigation costs.
Those changes included eliminating what are known as “one-way attorney fees,” which have required insurers to pay the attorney fees of policyholders who successfully file lawsuits.
Also, the law eliminated the long-controversial practice of assignment of benefits for property-insurance claims. Assignment of benefits involves policyholders signing over claims to contractors, who then pursue payment from insurers. Insurers contend the practice has led to increased lawsuits.
Lawmakers also made changes specifically geared toward Citizens. As an example, they approved preventing Citizens policyholders from being able to renew coverage if they receive policy offers from private insurers that are within 20 percent of the cost of the Citizens premiums.
That move was aimed at steering more customers into the private market. Gilway has often complained about Citizens charging less than private insurers, saying last year that Citizens’ rates were “insanely low.”
But for residents in some areas of the state, Citizens has been virtually the only option for coverage. With those residents paying thousands of dollars a year for policies, the Legislature has constrained the ability of Citizens to raise rates.
Gilway said Thursday the changes in last week’s special legislative session “will absolutely have a lasting impact on Citizens and Florida.”
“For us, it’s not only a legislative success, but it’s a huge success, I think, for Citizens,” he said.