Insurance Reform Group Argues for Citizens Property Insurance Board

Jan 22, 2013

The following article was published in The Sunshine State News on January 22, 2013:

Insurance Reform Group Argues for Citizens Board

By Jim Turner

With one of the top critics of Citizens Property Insurance Corp. calling for board members to fall on their swords because of a fault-finding report on travel expenses, the Florida Association for Insurance Reform says such a move would be a mistake.

FAIR Executive Director Jay Neal argued in a letter to editors that removal of the Citizens board members would “impede progress” to fix Florida’s insurance market.

“We must also consider the cloud removal of this board would cast over future board recruitment,” wrote Neal, whose organization last year filed a class-action lawsuit against the state-backed property insurer for allegedly artificially raising home values in order to charge higher premiums.

“The best and brightest will simply decline to serve rather than risk public embarrassment in such a toxic political environment.”

Last Friday, state Rep. Mike Fasano, R-New Port Richey, charging that there is an obvious culture at Citizens to spend in a “blatantly wasteful fashion,” called for board members to resign because of the 25-page report by Scott’s Chief Inspector Melinda Miguel.

The report found that between Jan. 1 and Aug. 31, 2012, Citizens Property compiled more than $1.3 million in travel-related expenses, of which $454,111 was related to auto travel, $163,625 to airfare and $441,746 for hotel accommodations. Another $138,320 was for meals and $107,751 was billed under room fees.

Gov. Rick Scott, who directed Miguel to undertake the study, has said the company needs to follow state travel rules and cut out international trips.

Citizens board member Carol Everhart has already proposed that Citizens institute travel restrictions used by the state government.

The chief inspector’s report highlighted spending by managers and board members, but didn’t reveal names.

Neal supported disciplinary action for individuals who violated policy “consistent with sound human resource practices and due process, not out of concern for how it will look in the newspapers.”

Neal also defended the time put in by the board members without salary.

“The considerable time these board members are required to spend could be spent earning money in the private sector, meaning that in terms of opportunity costs, it actually costs them to serve,” Neal wrote. “They do not serve to pad resumes. They have already reached the pinnacle of their professional lives.”

He also highlighted Scott’s two appointees: “John Wortman, now in retirement age, once presided over Louisiana’s version of Citizens and offers decades of experience. John Rollins is a brilliant actuary, Duke University graduate, and a leading expert in his field. 

“Although we have often disagreed on policy issues, I know them both to be conscientious and honorable public servants.”

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