Senator Fasano: Citizens Not the Only Insurer Impacted by 2006-2008 Re-Opened Claims

Subsequent to the June 10, 2008 Florida Cabinet meeting at which the Florida State Board of Administration emphasized the impact of re-opened 2005 Hurricane Wilma claims on the Florida Hurricane Catastrophe Fund (“CAT Fund”), the Cabinet  requested additional assurance on the legitimacy and appropriate handling of these claims. 

In a recent letter to Task Force for Citizens Claims Handling and Resolution (“Task Force”) Appointing Officials, Task Force Chairman and State Senator Mike Fasano indicated that while the Task Force already had prepared its third and final report on Citizens Property Insurance Corporation’s (“Citizens”) closure and handling of the 2004/2005 hurricane claims, it appeared to be advantageous for the Task Force to extend the scope of its review.

A preliminary Task Force review determined that Citizens’ Office of the Internal Auditor will be conducting a targeted independent audit and issuing a report on the same issue.  That report is expected to be completed by mid-October, 2008.

Concurrently, the Florida Office of Insurance Regulation (“OIR”) began its statutorily-required market conduct examination and operations review, which likely will include analysis of data from May 2005 through May 2008. The OIR has indicated that although theirs will not be a comprehensive claim review, OIR auditors will review the process used by Citizens in relation to its established claims handling procedures in the processing of 2005 Hurricane Wilma claims. The review also will include a random sample of claims processed before and after the CAT Fund was triggered.

In light of the two anticipated reviews, Senator Fasano indicated that the Task Force will not conduct its own independent review. 

Senator Fasano cautions in his letter that ” . . . while the focus has been placed on Citizens, it is not the only insurer that paid re-opened and newly reported claims in 2006-2008 for losses caused by Hurricane Wilma.  According to the CAT Fund, although loss data is considered confidential per insurer, this situation may have impacted a wide segment of the insurance industry due to the observation of similar adverse loss experience.”

A copy of Senator Fasano’s letter may be viewed by clicking here.

 

Should you have any questions or comments, please do not hesitate to contact Colodny Fass.

 

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