Lt. Gov. Toni Jennings, chairwoman of the governor's Property and Casualty Insurance Reform Committee, recently sat down with Treasure Coast Business Journal correspondent Michael Peltier to discuss the state of insurance in Florida.

Q. You've chaired commissions on universal pre-kindergarten, affordable health care access and been intimately involved in negotiations over workers compensation and education issues, how does this challenge rate in comparison.

A. This might be my ultimate challenge. If I wasn't concerned about keeping a private market for insurance, things would be much easier, but I don' think a state-only insurance role is appropriate.

Q. What's been done so far one hurricane insurance front?

A. The Legislature last session spent more than $1 billion: $715 million to reduce the (hurricane) assessment. Another $250 million for mitigation and $250 million (to the fund.)

Q. Are hurricanes the only reason property insurance costs have risen so rapidly in the past two years?

A. Everybody is yelling about the fact that hurricanes have caused this. Nobody has been able tell where we'd be if we hadn't had those hurricanes and rates were strictly due to insuring current value.

Q. What can property owners and businesses expect from the commission?

A. The charge the governor gave me was short-term relief if that's possible. But we're also to look at long-term systemic changes. Are there things we can do to insulate us from a hit again?

Q. What should property owners not expect to happen?

A. What you shouldn't anticipate is that government can step in and put things back the way they were. Don't expect your insurance to go back to the way it was before the storms. But you know what? Your property value will never go back to what it was 10 years ago, either.

Q. There have been some concerns raised that insurance representatives are too well represented on the panel.

A. We've gotten some criticism in some of the press that we've got all industry people. Well, they don't get a vote. They are there to answer questions and for us to field things from. I don't know how you talk about this issue without people involved in it.

Q. What does the industry need to bring into the table?

A. First and foremost, they need to be more aggressive about credit for mitigation. If we are in fact encouraging people and helping them strengthen their homes (and businesses) it needs to be reflected in insurance premiums.

Q. Does that mean more regulation on carriers?

A. Everybody is saying we'll write all perils but we won't write wind (coverage.) If you are going to take the cream, maybe you should have some of the bad stuff as well. Maybe to write in this state you need to take some of the wind.

Q. There are plans for a November special session. Will you have recommendations ready by then?

A. Yes. The governor has been pushing me and I'm pushing the committee along.

Q. What about Citizens Property Insurance Corp.? It is now the state's largest property insurer and is also, by law, the most expensive.

A. Short-term relief is not as difficult as long-term change. In the short term, you can provide relief by finding money somewhere. Systemic change is what is the role of Citizens. Do we want it to remain a wind-only coverage or do we allow it to cover all perils that would give them a revenue base to rely on?

Q. Why shouldn't Citizens just take over it all, residential and commercial?

A. The free-marketers will be gone and the state will be there if the state pays the losses. That's $42 billion in losses. A penny on the sales tax raises $3.4 billion. How many pennies do you have to do that to make it work? This is not one with an easy answer.

Q. What's the future of Citizens? Is it going away any time soon?

A. The size of Citizens makes it difficult to talk about anything but trying to shrink it.

Q. Many experts say it is the lack of reinsurance that his largely to blame for rising commercial and residential rates. What proposals are you considering to address reinsurance?

A. One would be to take the existing (Hurricane Catastrophe Fund) and lower the retention rate. That we could do right away, which would lower the amount of reinsurance insurers would need. We'd have to do that by the end of the year because most reinsurance is purchased in January. We would want to tie that to ratemaking so the savings get passed along. Otherwise, all we're doing is giving money to the company.

Q. And the other proposal?

A. There has been discussion about going to the private market and developing an investment product (similar to commodity market) dealing with wind risk.

Q. Are there some federal issues as well?

A. A congressional bill would allow for larger reserves for hurricanes that would remain tax-free. Now they pay dividends so they don't have to pay taxes. Another idea would be to set up hurricane savings accounts that would also be tax-free.

Q. Lawmakers last year set aside $250 million for matching grants or low-interest loans to help homeowners and businesses harden older structures built before tougher building codes were enacted. What is the future of that initiative?

A. I think that is the way to go. We're looking at increasing the amount of money that people can access to harden their homes.

Q. How would you pay for it?

A. My hope would be to find a revenue source, maybe a premium tax, or something you could actually identify, because we won't always be in the posture where we have all this general revenue available.

Q. How has mitigation program been received so far?

A. About 80,000 people have made applications in Miami-Dade, Broward and Lee counties. We haven't even made our way up to the other counties.

Q. What about the new commercial JUA? It is up and running and available to help small businesses with $1 million or less in liability. What has the response been?

A. As of late September, everybody who had gone through Florida Market Assistance Program (which links property owners with private insurers) had found a carrier. As of then, the JUA had not written its first policy.

Q. When did the commercial market woes come into the picture?

A. It was after the Legislature met in May or maybe June when we started hearing reports of increases of not just double and triple, but quadrupled premiums. That was the impetus of looking at it again.

Q. How will the new commercial JUA affect Citizens?

A. We're looking at maybe pulling some of those commercial accounts in Citizens into the commercial JUA.

Q. How are rates affecting economic development?

A. With two years of storms, most people would say with that kind of loss, Florida would be struggling. But we're not. We're generating jobs, we have low unemployment and the economy is good. Because the economy is good, property values have gone up.

Q. How can people stay abreast of what the commission is doing?

A. They can go to our Web site, www.myfloridainsurancereform.com.