Citizens Property Insurance defends dismantling watchdog office, Governor Rick Scott not pleased

Oct 18, 2012

The following article was published in The Florida Current on October 18, 2012:

Citizens defend dismantling watchdog office, Scott not pleased

By Gray Rohrer


Citizens Property Insurance Corp. officials defended the move to fire four members of its Office of Corporate Integrity on Thursday, saying it is “realigning” the functions of reviewing complaints of corruption, malfeasance and harassment under different offices.

“Citizens’ corporate integrity functions have not been eliminated. They have been realigned under other business units, including the Office of Internal Audit, the Ethics Officer and the Employee Relations Office, in order to ensure that we are following current corporate best practices for handling and investigating allegations of potential employee fraud or misconduct,” a Citizens press release states.

But Gov. Rick Scott is not happy with the move. He wrote a letter to Citizens CEO Barry Gilway on Thursday, saying he is “troubled” by the firings and noting that replacement watchdogs have yet to be hired.

“As of today, new personnel have not been hired to handle the increased workload. An effective compliance system cannot be achieved without an adequate number of independent, highly trained professionals,” Scott’s letter states.

The sacking of the watchdog office, first reported by the Miami Herald, is the latest controversy for the state-run property insurer.

Travel spending by top Citizens executives and board members is being reviewed by the Chief Inspector General after another Herald story detail opulent hotel stays and dinners while meeting reinsurance executives abroad. On Friday, board members will meet to contract with a third party to review a proposed incentive program that would provide low-cost loans to private insurers that take over Citizens policies. Some lawmakers have derided the program as a corporate giveaway at the expense of its surplus, while legislative leaders like incoming House Speaker Will Weatherford have said the program needs to be vetted by the Legislature before being implemented.

Gilway and Citizens staffers recommended the third party review in concession to lawmakers’ calls to analyze more carefully the program that plans to loan $350 million to private companies, but Citizens officials are still hopeful the plan can be in place by February so participating companies can calculate their reinsurance costs for the 2013 hurricane season.

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