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Riding the crest or heading for a wipeout?

When Hurricane Andrew hit, Florida Insurance Commissioner Tom Gallagher put some of the country's top insurance executives in helicopters and flew them to Homestead to see some of their devastated policyholders in person.

"I wanted them to see, feel, touch and smell what hit South Florida," he recalled.

The in-your-face tour, unorthodox in the stodgy insurance world, seemed to work. Gallagher said it helped sensitize insurers when it came time to start paying claims.

Ten months later, Gallagher's flashy profile _ toothy grin, abundant hair, trademark suspenders _ and his energy in attacking the ills left by Andrew have boosted his popularity and made him a natural candidate among Republicans for the 1994 governor's race.

If he chooses to run, as many expect, his running mate _ at least in the public's mind _ will still be Andrew.

But the next few months are crucial for Gallagher. He still must help resolve the statewide crisis in homeowners insurance brought on by Andrew. And later this year, he must figure out how he can sell Floridians on the whopping increases in homeowners insurance rates that are on the way.

"Tom Gallagher is riding the crest of a very powerful wave and has the opportunity to step softly off on the beach or wipe out big time," said Tom Slade, chairman of the Florida Republican Party.

Among Republicans, Jeb Bush and state Attorney General Jim Smith already have announced they are running for governor, and state Senate President Ander Crenshaw and others may enter the race, too.

Gallagher, an unsuccessful candidate for governor in 1982 and 1986, knows full well there may be enough wind left in Andrew to flatten his gubernatorial chances if the insurance crisis deepens.

"In six months, I may not be able to run for dog catcher," he conceded recently.

"Some of the worst political fallout from the insurance crisis is still around the corner," including higher rates for homeowners and workers' compensation, said Sen. Curt Kiser, a Republican from Palm Harbor who is a strong supporter of Gallagher's work as insurance commissioner.

Gallagher, in response to frequent questions about his candidacy, says his plate is full and he has made no plans. Andrew's impact is so big, he said, that "we're on uncharted waters."

"Tom has told me he is not going to make any decision until he has the Andrew mess behind him," said Jim Bax, a close friend and a major fund-raiser for Gallagher's past political races.

In some ways, Andrew has proved a godsend to Gallagher. Like any momentous event, it has helped shine a public spotlight on him. It also has obscured, for now, issues like the state's workers' compensation rates, which continue to soar.

And Andrew has helped push into the shadows several less impressive moments in Gallagher's tenure as insurance commissioner.

In 1991, Jacksonville-based Guarantee Security Life Insurance Co. became the biggest insurance failure in Florida history. Throughout its rise and fall inthe 1980s, the company was a house of cards, but it was never seriously questioned by the department of insurance.

The extent of alleged fraud at Guarantee caught the attention of a U.S. Senate panel and its chairman, Sen. Sam Nunn, D-Ga. Last year, he summoned Gallagher to Washington to explain what happened.

For an elected state regulator of the powerful insurance industry, Gallagher revealed a surprising lack of skepticism in his testimony.

"As someone who believes that most businesses are honest and that the marketplace is a good self-regulator, it pains me to accept what I've learned in this job," Gallagher told the Nunn committee. "Today, regulators must assume the role of policemen."

Earlier, Gallagher's department was hoodwinked by another insurance company, Orlando's International Forum Florida. State regulators were slow to react to IFF, which cheated 9,000 Floridians out of at least $7-million in unpaid health insurance claims.

Again, Gallagher seems to have given IFF the benefit of the doubt. "We believed them longer than we should have," he said. "But the department had never seen a criminal fraud like this before."

The IFF affair is Gallagher's biggest disappointment as insurance commissioner, said department representative Jill Chamberlin.

With Andrew, Gallagher is working with a clean slate. Even consumer advocates like Walter Dartland in Tallahassee and Robert Hunter of the National Insurance Consumer Organization say that, although Gallagher isn't as pro-consumer as they would like, he's doing a decent job.

"I'd give him a B-plus," said Hunter.

Karen Gievers, a Miami lawyer and Democrat who is running for insurance commissioner in 1994, is far less complimentary of Gallagher.

"The instability in Florida's insurance markets could have been better handled by better regulations," said Gievers, president of the Dade County Bar. Nor should 10 insurance companies have failed as a result of Andrew, she added.

Despite his critics, Gallagher finally seems to be winning the respect of many senior political observers.

His old reputation as a party boy and legislative lightweight during his 12 years in the state House has faded slowly. But it is fading.

Kiser says he recalls Gallagher's fun-and-games image well.

"It was the wrong image, but it was there," said Kiser, who, as the former House minority leader, said he often relied on Gallagher on legislation involving business issues.

Bax agrees that Gallagher, who is 49 and divorced, has matured a lot in recent years. But he adds that Gallagher's skills as a strong manager and natural salesman have been put to much better use as treasurer-insurance commissioner than as a state legislator.

Slade, the state GOP chairman, also acknowledges that Gallagher has surprised him.

"He has exceeded virtually all expectations except perhaps those of his mother and father. He has probably run the best state treasury and insurance office in our history," said Slade.

Most of the time, Gallagher seems to have one speed: fast. He travels around Florida extensively, often visiting as many as five cities a day to speak to various groups about _ what else? _ insurance troubles.

In his suit pocket he keeps a tiny calendar of his scheduled events that aides are constantly updating. And when away, Gallagher each day typically receives by Federal Express a 2-inch file of memos, correspondence and materials.

Gallagher has even got a small stable of insurance jokes he calls upon to break the monotony of speaking day after day about insurance. A state senator, worried about the insurance crisis, asked Gallagher what would happen "if we have another hurricane?"

Quipped Gallagher: "What do you mean, we? I'm outta here. I only do one hurricane per office."

In Tallahassee, Gallagher's office in the Capitol is full of personal touches. The saltwater fish tank, a sign of Gallagher's enjoyment of the sea, includes fish named Blue Tooth, Gus, Leo and Harry II (the first Harry, a trigger fish, passed away).

A football autographed by former quarterback Fran Tarkenton is on a table. A bonsai tree, and a framed flag commemorating first place in a Clearwater-to-Key West sailing race, are also there.

On his shelf, beside the insurance statutes, are books about Ybor City, Miami, coral reefs and the Securities and Exchange Commission's battle with Wall Street. No longer on the shelf: Keeping the Love You Find: A Guide for Singles.

Gallagher is a meticulous dresser. Even when stomping around steamy South Dade after Andrew, Gallagher could be found in T-shirt and khakis _ and suspenders. His hair, one key to his boyish look, periodically seems to take on slightly different shades of reddish brown. It is the target of some gentle ribbing from his friends and workers.

Gallagher bought a 53-year-old red-brick house in Tallahassee last year and has spent considerable time renovating it. Now he likes to entertain friends there.

At home, Gallagher uses his computer to tap into the insurance department. When an idea strikes, he is well known for sending late-night electronic messages to the computers of department staffers.

"It's better than calling them at midnight at home," said Gallagher.

For commuting, Gallagher relies on a 1974 Volkswagen, a hand-me-down from his parents. A second car, a 1971 gold Mercedes 280 SL Coupe, gets occasional use.

Gallagher, who earns $94,000 in his government job, has prospered through various investments.

Last year, he declared a net worth of just over $1-million. In addition to his Tallahassee home, he owns several condominiums and triplexes in the state capital and homes in Miami. He also has a 10 percent stake in a company that has invested in land in Highlands County, and has about $50,000 worth of stock in the tiny Prosperity Bank in St. Augustine, whose chairman is former legislator Hamilton Upchurch.

Pushing his authority

As insurance commissioner, Gallagher considers himself a risk taker.

After Andrew hit last August, he pushed his statutory authority _ to the chagrin of insurance companies _ by issuing one emergency order after another to make sure the insurance market did not crumble.

He set a deadline for insurance adjusters to reach homeowners with claims. He ordered insurers not to cancel any homeowner for non-payment of premium for 90 days. And when several insurance companies failed from Andrew losses, Gallagher helped muscle through the Legislature approval of a $500-million bond to help pay the claims of policyholders.

Last month, Gallagher in an emergency order invoked a 90-day freeze on insurers dropping customers. Then he persuaded the state's reluctant governor and Legislature to make the moratorium law. The freeze now lasts until Nov. 15.

Bax said Gallagher has natural political instincts.

"Tom is a salesman and wants people to have low expectations," he explained. "It's one of the rules Tom lives by."

That way, he said, Gallagher can "undersell and overdeliver."

Tom Gallagher

Position: State treasurer, insurance commissioner, fire marshal and member of state Cabinet. Elected in 1988, again in 1990.

Age: 49.

Financial: Salary is $94,000. He puts his net worth at just over $1-million, mostly in real estate.

Political: Republican. Appointed to head Department of Professional Regulation in 1987, resigned in 1988 to run for treasurer-insurance commissioner. Made unsuccessful runsfor governor in 1982, 1986. Served in Florida House for Dade County in 1974-86.

Business experience: Served in 1986 as president of Gallagher Financial Systems, software firm now run by brother Doug. In 1973-'83, served in sales and management with mortgage insurance companies. In 1967-'73, sold school and library furniture.

Military: Served two years in U.S. Army, member of Presidential honor guard in Virginia.

Education: degree in business, University of Miami, 1965.

Personal: Divorced, no children. Catholic.

Hobbies: Sailing, fishing, tennis, reading suspense novels (Robert Ludlum, Tom Clancy, etc.), entertaining at newly renovated, red brick home in Tallahassee that was originally built in the '40s.

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