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Originally published Wednesday, June 13, 2012 at 11:54 AM

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Private insurance exec to lead Fla.-backed firm

A private insurance executive with more than four decades of experience was chosen to lead Florida's state-backed Citizens Property Insurance Corp. on Wednesday.

Associated Press

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ORLANDO, Fla. —

A private insurance executive with more than four decades of experience was chosen to lead Florida's state-backed Citizens Property Insurance Corp. on Wednesday.

Citizens' governing board selected Barry J. Gilway, 66, largely on the strength of his lengthy career in the private sector. He is president and chief executive officer of Seattle-based Mattei Insurance Services and will have the same titles with Citizens.

It has grown to become the largest property insurer in Florida with more than 1.4 million policyholders. The threat of hurricanes has scared off many private insurance companies while others in many cases have raised premiums higher than homeowners and businesses are willing to pay.

Gov. Rick Scott and other politicians want to shrink Citizens, increase its revenues and grow the private sector again.

"If I'm trying to get private companies to take up Citizens' policies in a depopulation strategy, I need to know what their business models require and what their reinsurance needs are in order to successfully pull that off," said board chairman Carlos Lacasa. "From this perspective, Barry Gilway is a great choice."

A second finalist, Glenn Pomeroy, 56, is a former Democratic state legislator from North Dakota who now serves as the chief executive officer of the California Earthquake Authority.

The board questioned both finalists for roughly an hour.

"The unanimous vote of the board was an indication of how the process worked," said Lacasa, a former legislator.

Citizens' interim president, Tom Grady, also a former Republican lawmaker, was not among the final candidates but said he would stay on as long as needed.

"I would like to assist in any way I can in the transition," Grady told the board. "Barry will be a great CEO for this organization."

The board will have a workshop on its rates in Miami on July 16 with a decision expected at its July 27 meeting. It is considering a proposal that would increase premiums for new customers far in excess of a 10 percent cap. Advocates of that strategy argue the limit applies only to existing policies.

Lacasa, though, cautioned his colleagues last month about potential blowback from lawmakers if the board exceeds the cap without hearing what they have to say about the idea. He noted that state regulators approved a 32.8 percent increase after Citizens asked for a hike of more than 400 percent on sinkhole policies, which drew objections from legislators.

Citizens was created as the insurer of last resort for residents who could no longer get coverage from private companies.

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