Citizens Property Insurance Corporation Information Systems Advisory Committee Recommends Contract Approvals for Technology Services

The Citizens Property Insurance Corporation (“Citizens”) Information Systems Advisory Committee (“Committee”) voted yesterday, May 24, 2012, to recommend Citizens’ Board of Governors (“Board”) approval of a $26.6 million contract with CSX Technology Incorporated (“CSX”) to handle the technical aspects of a long-term data center co-location and consolidation.

Citizens plans to consolidate its Data Center operations from three sites to two, with one for production in Jacksonville, Florida, and another dedicated to disaster recovery in Tampa, Florida.

Citizens’ contract with CSX includes an initial 10-year term at a cost of $12 million, an initial five-year renewal option for $6.7 million, a second five-year renewal option for $7.5 million and a one-time build-out cost of $400,000.

The implementation involves the consolidation of equipment and services from multiple existing data centers to one site supporting production and test-development and one disaster recovery site.

Robert Sellers, Citizens Vice President of Information Technology Strategy and Architecture, said the process to select CSX relied heavily on external expertise.  CSX was incorporated in 1985 and has more than 25 years of experience in serving a variety of industries, Mr. Sellers noted.  Its parent company is CSX Corporation.

“This is a significant procurement for Citizens, a substantial amount of funds over a significant period of time,” Mr. Sellers said.  CSX Technology, which is based in Jacksonville, was chosen from a field of 10 applicants, he added.

 

Citizens Information Technology Department 2012 First Quarter Activities

A report on Citizens’ Information Technology (“IT”) Department accomplishments during the first quarter of 2012 was deferred due to a lack of time and will be presented at the next Board of Governors meeting.

Highlights of the report include the following updates to Citizens’ commercial policy systems:

• Completed implementation of the 1099 Backup Withholding Project for Commercial Lines Systems (related to Internal Revenue Service compliance)
• Implemented new A-Rates for Commercial Multi-Peril policies and enhancements to align Commercial Multi-Peril Rates for A-Rated policies in wind areas with Commercial Wind-Only A-Rates
• Implemented Assumption functionality in the Commercial Wind-Only System.

Major milestones also were reached in completion of the first delivery of data to the Florida Department of Revenue (“DOR”) and preparations for ongoing data exchanges between the DOR and Citizens. This data exchange capability will support the DOR’s mandate to identify parents with unpaid child support.

Significant enhancements also were made to Citizens’ Electronic Policy Administration System (ePAS – Personal Lines Policy Management).  Further, the Policy and Claims Data Integration system’s Subrogation and Salvage data fields were synchronized with the Claims Tracking System to eliminate the need for adjusters to access multiple systems.

The IT Department report noted that it has also implemented Cabinet Initiatives to limit maximum dwelling coverage to $1 million dollars for new policies, as well as to modify existing policies at renewal in line with sinkhole restrictions for additional counties, and reduce and eliminate specific coverages.

Both the assumption functionality for Citizens’ Personal Lines Account Wind-Only policies and the policyholder acknowledgements of surcharges and assessments have been implemented.

In other business, Kelly Booten, Citizens Vice President of Enterprise Planning and Project Portfolio Management, gave an update on the Guidewire/Core System Implementation project.  Ms. Booten noted that a two-month contract extension has added an additional $884,000 to the cost.  The 2012 budget for the project is estimated to be $3.5 million over budget due to a need for a higher contractor-to-employee ratio to implement the project, she pointed out.

The Committee recommended Board approval on the following action items:

• The purchase of BMC software (which recently purchased Numara software) licenses and implementation services for $201,000. The additional licensing and functionality is required to enhance capabilities in the areas of IT asset and configuration management
•  The purchase of a 12-month contract for annual preventative maintenance and products for $300,000
•  The purchase of retainer agreements for two satellite communications vehicles for $864,300
•  The purchase of technology equipment for the Jacksonville and Tampa facilities for $1.2 million

With no further business before the Committee, the meeting was adjourned.

To view the meeting materials, click here.

 

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