Task Force on Citizens Property Insurance Claims Handling and Resolution Meeting Report

The Task Force on Citizens Property Insurance Claims Handling and Resolution (“Task Force”) held a meeting on Friday, February 01, 2008. Discussion included claims and agent training issues, updates on new and re-opened claims and public testimony. To view a copy of the agenda, click here.

The meeting was called to order by Senator Mike Fasano, Chairman.  Task Force members, House Speaker Marco Rubio and representatives from Citizens Property Insurance Corporation (“Citizens”) and Florida Department of Financial Services (“DFS”) were in attendance.

Eduardo Mareovich, Citizens’ Senior Vice President of Claims, gave a presentation detailing the structure of his department, as well as plans to increase its non-catastrophe claims handling staffing during 2008. By the end of 2009, the goal is for Citizens’ Claims Department to handle 80 percent of all non-catastrophe claims internally. Mr. Mareovich also explained claims handling procedures, customer service statistics, and claims staff education and standards. To view a copy of this report, click here.

Marta Arrington, DFS Director of Consumer Services, reported on insurance policyholder claim concerns and gave suggestions to reduce consumer complaints, many of which are due to delays in the claims paying process. To view a copy of this report, click here.

Joyce Bellows, Citizens Chief of Internal Audit, gave a presentation on the newly-formed Office of the Internal Auditor. Ms. Bellows detailed her department’s 2008 audit plan and office organization and policies. To view a copy of this report, click here.

A presentation was given on Citizens’ insurance agent training, audits and compliance. The report detailed how many training agents are in the field at this time, what requirements need to be met in order to become an agent, what training agents go through, how agents are audited and what steps are taken after an agent’s audit. To view a copy of this report, click here.

Citizens Assistant General Counsel Curtis Hutchens gave the Task Force an update on open claims from the 2004/2005 season, which included tables showing new and re-opened claims from June 18, 2007 to December 31, 2007. As of December 31, 2007, there were 18 claims in mediation, 74 claims in appraisal, 363 in litigation and 20 in supplements. As of the end of January, 2008, those numbers have dropped to 5 claims in mediation, 45 in appraisal, 281 in litigation and 12 in supplements.

As of December 31, 2007, Citizens had 1,131 new claims from the 2004/2005 season, 6,374 re-opened claims and 5,723 closed claims. It was stated that 90 percent of re-opened claims were brought by attorneys. The statute of limitations to re-open a claim is five years from the date of the original claims contract.

A presentation detailing Citizens reimbursements to policyholders due to re-opened claims will be given at the next Task Force meeting.

To view Citizens’ 2004/2005 Open Claims Update, click here.

To view Citizens’ New and Re-Opened Claims data table, click here.

Only one member of the public—a public adjuster (“PA”)–offered testimony. The PA suggested to the Task Force that Citizens’ field adjusters be given the authority to issue an advance check for emergency housing to the insured in the event of a catastrophic loss. He added that legislation has been proposed prohibiting PAs from issuing advance checks.

Chairman Fasano added that the proposed legislation institutes a 72-hour “stay away” period for PAs in return for all insurance companies issuing a policyholder advisory regarding the insured’s right to contact a PA if the insured deems it necessary. According to Senator Fasano the legislation is being proposed to cut down on “ambulance chasing.”

Public adjuster advocates previously have stated that they oppose the bill and support full solicitation access by PAs to insureds.

To view a copy of the Task Force Public Adjuster bill, click here.

House Speaker Rubio responded to the PA who testified, saying that allowing full access by PAs to policyholders was “unacceptable.” The Speaker also expressed his position that contractors’ contact with consumers should be similarly limited as well.

Chairman Fasano assured that this issue will be covered in more detail at the next Task Force meeting on February 28, 2008.

The meeting was then adjourned.

Should you have any questions or comments, please do not hesitate to contact this office.