Citizens Property Insurance CEO Updates Florida Cabinet On Progress; Governor Requests Follow-Up Policyholder Survey
Mar 19, 2013
During the Florida Cabinet meeting today, March 19, 2013, Florida Governor Rick Scott asked Citizens Property Insurance Corporation (“Citizens”) President and CEO Barry Gilway to follow up on educational efforts being made to inform policyholders of their assessment risk.
While Citizens’ sole agenda item was the request for approval of a statutory outsourcing implementation plan, Mr. Gilway also appeared before the Cabinet today to update members on Citizens’ progress to date in addressing its various challenges revealed by extensive negative media coverage, as well as by a recently released report by Florida’s Inspector General on the State-run insurer’s corporate travel expense policies.
Citizens, Mr. Gilway explained, has an expense-to-premium ratio that is 12 percent less than that of the private market–an indicator of the company’s efforts to hold down costs. In a later extensive discussion on employee retention, he also said that Citizens’ salaries rank in the lowest percentile of the property and casualty industry governmental sector and, because of this fact, Citizens is having great difficulty recruiting and retaining qualified employees.
In response to sharp questioning from Florida Attorney General Pam Bondi on why certain employees who had not conducted themselves in a “reasonable” manner were still working at Citizens, Mr. Gilway essentially said he could not hold their questionable past actions accountable to the newly-installed standards that did not exist during the time those actions had been taken.
Citizens’ depopulation efforts during the past year have produced notable results, with the recent Weston Insurance wind-only takeout of over 300,000 policies having served to reduce the overall assessment risk to Florida policyholders by nearly 40 percent.
However, in conducting a recent survey, Citizens learned that over 80 percent of its policyholders don’t understand the risk associated with its assessment potential. To address this problem, Mr. Gilway related that an “assessment education letter” is being sent to policyholders 75 days prior to renewal to help clarify how they can decrease their assessment risk by up to 46 percent through entering the private market. A new on-line calculation tool will also be introduced to help policyholders draw that same comparison.
Governor Scott asked Mr. Gilway to conduct another such survey after September 15, 2013 to determine whether Citizens’ educational efforts are having any impact.
Mr. Gilway reviewed Citizens controversial mitigation discount inspection program, which he said is “winding down.” The program, he said, has revealed a dramatic increase in the award of mitigation discounts, while relative policy counts have remained flat. Notwithstanding, 11,000 policyholders to date have taken advantage of Citizens’ new program that allows for a follow-up inspection.
He also addressed the proposed “clearinghouse,” a concept that would enable Citizens to manage competitive private market quotes for the purpose of preventing policyholders from securing Citizens coverage who have previously received a private market quote within 15 percent of Citizens’ rates.
To view a report on today’s meeting from the Bradenton Herald, click here.
To view the complete Cabinet agenda, click here.
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