Florida’s Citizens Property Insurance Claims Committee Hears Updates
Jun 6, 2013
At its meeting today, June 6, 2013, Citizens Property Insurance Corporation (“Citizens”) Claims Committee (“Committee”) heard status reports and updates on various types of claims received by the State-run insurer through March 31, 2013. No action was taken during the meeting.
To view the meeting materials click here.
Citizens Vice President of Claims Lance Malcolm opened the meeting, noting that First Notices of Loss (“FNOL”) received through March 31 showed a 20.2 percent decrease compared with the same period a year ago. Statistics show 12,169 FNOLs in March 2013, compared with 15,250 in March 2012; 8,234 in February 2013 compared with 10,198 in February 2012; and 4,403 in January 2013 compared with 5,060 in January 2012.
Mr. Malcolm attributed the decrease to reductions in the policies-in-force, the severity of weather events impacting Florida and an overall reduction in claims frequency.
Of the FNOLs received through March 31, 2013, new sinkhole claims dropped by 52.5 percent for that period and water loss claims decreased by 17.1 percent during the same time, he noted.
He further reported that the First Quarter 2013 closing ratio for sinkhole claims is “exceptional” at 122.5 percent and 102.4 percent for non-catastrophe claims.
In the area of water loss claims management, Citizens’ Water Loss Team is being trained in water mitigation standards, he said.
Meanwhile, Citizens’ Sinkhole Team is continuing to focus on reducing pending inventory through reconciliations. And, in the area of litigation, Citizens’ Early Settlement Team has been negotiating non-trial cases for early resolution, with an average settlement time of new cases of 32 days. The average time for dismissal is down from 184 days to 162 days for 2012, he noted.
In the area of Customer Service, Mr. Malcolm explained that the top three complaint issues are delays involving claims (21.5 percent), unsatisfactory settlement offers (29.92 percent) and denial of claims (14.04 percent). Those results, taken from a customer poll, are based on 449 returned surveys received through March 31, 2013.
In the area of subrogation recoveries, Citizens’ First Quarter 2013 referral rate was 8.6 percent compared with the industry benchmark of 3.32 percent, it was noted. Current subrogation referrals currently include 1,932 pending assignments with a projected recovery value of $3.7 million.
“We have returned approximately $86,000 to 76 insurers,” he added.
Special Investigations Unit referrals, which include fraud cases, increased 34.6 percent in the First Quarter of 2013 compared with the same period in 2012. The Florida Division of Insurance Fraud referrals through the First Quarter of 2013 increased by 9 percent compared with the same period in 2012, it was also noted.
Citizens’ Assistant Director of Catastrophe Operations Jimmy Johnson gave the Committee a brief update on expectations related to approaching Tropical Storm Andrea, noting that the area in the storm’s path encompasses about 400,000 policies.
Mr. Johnson said he is expecting 5,000 to 6,000 claims to be filed in the storm’s wake, similar to what was experienced in the wake of Tropical Storm Debby last year.
“We are expecting to absorb those additional claims into our daily workload,” Mr. Johnson said.
In regard to hurricane readiness, he noted that negotiations are underway related to generators and are in the final phase of solicitation, with resolution expected by mid-June. The satellite contract was extended through the end of 2013, he reminded the Committee.
Citizens’ Insurance Operations Program Manager Keri Dennis summarized the following totals regarding Citizens’ independent insurance adjuster inventory as of May 24, 2013:
Citizens has 3,894 total independent adjusters. Of those:
- 1,118 adjusters are approved and deployed
- 2,776 adjusters are approved but not deployed
- 3,294 are not approved/open (Ms. Dennis explained that “not approved” or “open” is terminology used due to minor missing requirements such as background issues that can be quickly resolved)
Citizens’ Chief Insurance Officer Yong Gilroy said it was especially good to see that 816 commercial adjusters are available to Citizens.
“That is a critical number in order for Citizens to address the risk that is along the coastline,” Mr. Gilroy noted. “I am most comfortable in that particular arena as we look at the overall capacity.”
Citizens’ Assistant Director of Litigated and Disputed Claims Unit (“LDCU”) Anne Olson said new litigation assignments are flat, but driven primarily by claim denials for water loss and long-term leakage.
Through April 2013, 2,866 files have been closed and/or settled, exceeding the 2,575 new litigation assignments for 2013, she pointed out.
Since Citizens’ Closing Team was established in January 2011 to process settled litigation files to conclusion, 20 percent of active pending files-or 2,353-are settled and await dismissal in court, she noted.
Top litigation drivers to date are water losses–accounting for 53.01 percent of all cases; weather-related losses-which are 22.67 percent of all cases; and sinkhole claims, which amount to 12.92 percent of all cases, it was noted. Others are long-term leakage, value disputes and partial claim denials, statistics show.
Recoveries related to court cases for 2013 year-to-date total $30,240.38. Twenty cases are pending with a projected possible recovery of $321,474.54, according to totals presented by Ms. Olson.
Citizens’ Legislative and External Affairs Director Christine Ashburn then gave the legislative update, noting the passage of SB 1770 relating to property insurance, which requires the creation of a Citizens Clearinghouse program.
She also reviewed HB 573 relating to manufactured and mobile homes, which requires Citizens to provide specified minimum coverage for mobile homes.
With no new business or open items to report, the meeting was then adjourned.
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