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Getting it all together: Florida''s new chief financial officer looks to the challenge of combining two formerly independent departments, as well as resolving key insurance issues. (State Regulation: Industry Strategies Q&A).

Article Excerpt
On Jan. 7, Tom Gallagher began serving as Florida's chief financial officer, heading up the Department of Financial Services. The new structure merges the Department of Insurance and the Department of Banking and Finance. He also serves on the Financial Services Commission with Gov. Jeb Bush, the attorney general and the agriculture commissioner. The commission appoints the director of the Office of Insurance Regulation. Before his inauguration, Gallagher talked with Best's Review about how the new structure would impact the insurance industry.

Q: What are the benefits of Florida's new cabinet structure?

Prior to the constitutional changes Jan. 7, the governorship was perceived to be weak because there were six other statewide elected officials that had fairly independent authority on a lot of areas that a governor has authority over in most other states, such as education, insurance and agriculture.

Q: How will the new structure impact the insurance industry?

I think what will change more than anything else is perception. When you have an elected insurance commissioner, people assume insurance companies contributed to his election and caused rates to go high. Then insurance companies assume that the reason the rates are low is that the commissioner is elected by the people and wants to keep the people happy. In politics, perception is reality, but [the new structure] eliminates the ability for those perceptions to be reality. And it takes the elected official out of the rate-approval process.

Q: Is the new structure unique among states?...