Florida Citizens Property Insurance Claims Committee Sends Independent Adjusting, Archive Management Contracts to Board; Reviews Catastrophe Response Plan

Feb 25, 2014


The Citizens Property Insurance Corporation (“Citizens”) Claims Committee (“Committee”) met on February 19, 2014 to hear updates on Citizens catastrophe planning and sinkhole-related developments, and to take action on several items.  

In considering its vendor-related action agenda, the Committee discussed a pending plan for a historic document management system that would be accessible to both staff and agents.  Current data would be migrated into Citizens’ existing GuideWire system.  The Committee voted to recommend that Citizens’ Board of Governors (“Board”) authorize Citizens to extend its contract with Cedar Document Technologies for ongoing support of the secure data archive.

The Committee also was updated on a proposed contract for multiple vendors to provide Citizens with independent adjusting services.  Because of an error in the procurement process, the Committee could not technically approve the list of vendors, but noted that the issue would be resolved the following day at a public Evaluation Committee meeting.

A motion was passed to submit the revised contract award to the Board for approval at its March meeting if no protests are filed in the interim.

Board ratification of the Claims Committee Charter was also approved with no discussion.  The document sets forth the Committee’s purpose, organization and operation and responsibilities.  

Later in the meeting, LaTrice Calhoun, Program Manager for Insurance Operations at Citizens, spoke to the Committee about the status of other vendor solicitations, including claims estimating and Citizens Sinkhole and Water Managed Repair Programs.  To view her executive summary, click here.

The Committee also discussed Citizens’ litigation strategies for 2014, which will move from that of sinkhole-related matters to overseeing litigation across all types of claims.


Catastrophe Update

Citizens’ Director of Claims Operations Jimmy Johnson updated the Committee on the State-run insurer’s catastrophe planning for the 2014 Hurricane Season.   A new claims handling system called ClaimsCenter will be introduced and tested for the purpose enabling Citizens to handle major events, from the first report of a claim to settlement conclusion.  

ClaimsCenter’s first test will be an off-site deployment exercise on April 24 with 160 to 180 independent adjusters.  Mr. Johnson related that over 4,700 adjusters have been secured.  A pending competitive solicitation for Adjusting Services could bring that number to 5,000, he added. 

During the exercise, mobile satellite equipment will be tested for Internet connectivity, as will fast-track claims handling by an inside adjusting unit for low severity claims.

Mr. Johnson also explained that an Emergency Operations Center will be deployed to a central location to assist Citizens’ policyholders with the claims process.  The exercise will simulate a “CAT 3” response.


Sinkhole Update

In his update, Citizens’ Director of Commercial Claims Operations Jeff Handy reported that the 2011 enactment of SB 408 led to an immediate favorable effect on the number of sinkhole claims.  Specifically, non-litigated claims have decreased by 62.5 percent from 2012 to 2013. 

However, while new litigation assignments decreased by 37.6 percent, new litigation on pending claims went up by 31.6 percent.  Mr. Handy explained that the increase was impacted by Citizens’ change in strategy to encourage policyholders to stabilize their homes.  The cycle time for incoming lawsuits is expanded as Citizens implements those repair strategies, which include development of its sinkhole managed repair program.

Mr. Handy cited four recent court rulings relating to “Method of Repair” disputes indicating that sinkhole stabilization should be performed.  Currently, 200 pending sinkhole claims in litigation have voluntarily moved into the proffered stabilization process.

“The judicial community is beginning to understand,” Mr. Handy said. “It is a new day when it comes to the matter of sinkhole claims.”

To access the complete meeting materials, click here.


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