Meeting Recap – Citizens Task Force Meets in Tallahassee on October 5, 2007

Oct 5, 2007

The Task Force on Citizens Property Insurance Claims Handling and Resolution (“Task Force”) met earlier today.  Representatives from Citizens Property Insurance Corporation (“Citizens”), along with representatives from the Office of the Insurance Consumer Advocate, presented the Task Force with updates.  Senator Mike Fasano (R) and Representative Julio Robaina (R) were present, and public testimony was heard. 

For your review, below please find the highlights of today’s meeting:

2004/2005 Open Claims – Update

As of June 18, 2007, there were 3,330 open claims.  As of September 30, 2007, 2,390 of those claims had been closed (i.e., 72%), leaving 940 claims pending.

Consumer Claims Department – Update

Citizens’ Claims Department maintains the following standards and procedures in order to ensure efficient and responsive communication with all policyholders and claimants:

• First Notice of Loss Reporting – 24 hours/day, 7 days/week;
• Personal contact initiated by the adjuster within 24 hours of receipt of a new assignment and no later than 14 days for a catastrophe event;
• A claim acknowledgment letter sent to policyholders/claimants within 24 hours of claim assignment and no later than 10 days of claim assignment for a catastrophe event;
• Inspection of claims within 48 hours of assignment during non-catastrophe events;
• Subsequent contact or status letters sent as necessary;
• All phone messages returned within 24 hours;
• Prompt acknowledgment and response to all written inquiries within 5 business days;
• Documentation of all claim and communication activity in the electronic claim file;
• Preset statements regarding scope of damage and repair costs included on all estimates;
• Disposition letters sent on all claims explaining settlements, payments or denials; and
• Customer satisfaction surveys mailed with final payments at file closing.

Citizens is also working to implement a secure process for immediate delivery of emergency claim funds, in addition to implementing loss mitigation activities to respond to critical situations.

Independent Adjusters – Update

Citizens is focusing on three areas:

• Certification Process;
• Building/County Code Enforcement Timeline; and
• Re-inspection and Quality Assurance.

Insurance Agents – Update

Citizens proposes the adoption of a commission restructuring program to achieve the following goals:

• Reduce commission expense consistent with Citizens’ public role;
• Increase surplus to pay claims;
• Moderate future rate needs;
• Establish similar commission levels for similar lines of business;
• Ensure that Citizens’ commission rates are not higher than the private market;
• Encourage the writing of multi-peril policies in wind-only areas; and
• Ensure fair compensation for agents for work performed.

Citizens’ staff will bring a recommendation to the Board of Governors (“Board”) at its next meeting.

Additionally, Citizens is implementing the following initiatives in order to ensure that its agents and staff are well-equipped to serve the public:

• Agent Certification Program
• Online and Field Training
• Increased Agent Reviews

Office of the Internal Auditor – Update

On September 20, 2007, the Board selected Joyce Bellows as its new Chief of Internal Audit.

The consulting firm of Huff, Thomas & Company (“Huff”) has been onsite at Citizens since late July 2007, ensuring that Citizens’ internal audit function continued throughout the search for the new Chief of Internal Audit.  Huff has been concentrating on the areas of internal control, check processing, claims, binding authority, policy administration systems and underwriting processes.  It is projected that Huff will have an audit report completed by the end of October 2007.

Although KPMG International was the Executive Committee’s choice as regards contracting a consulting firm to perform a top to bottom review of all service levels and operations, the Board would like the Executive Committee to meet with more candidates and report back.

Statute of Limitations – Update

The Office of the Florida Insurance Consumer Advocate (“FICA”) presented two (2) options—amending § 95.03 Florida Statutes, in order to permit homeowner insurance contracts to negotiate a shorter limitations period or amending § 95.11, Florida Statutes, in order to establish a new limitations period for homeowner insurance contracts.

There appears to be more opposition to changing the statute of limitations than to simply maintaining the status quo.  The statute of limitations is for the benefit of those being sued, and the courts have held that “insurance” is a written contract and therefore contract statute of limitations apply.

Task Force Chairman General Bob Milligan decided to table this issue, given that it is not time-sensitive, so that Senator Fasano and Representative Robaina may have an opportunity to review.

Proposed Legislation – Public Adjusters

Included with this e-mail is a summary of the proposed legislation, along with a draft of the bill.  The Task Force voted to delete paragraph (5) on page 3 and replace it with language to the effect that policyholders will have three business days to withdraw from a public adjustment contract. 

There was a heated debate on this bill and Chairman Milligan ended it by scheduling a workshop on November 5, 2007 in Tallahassee, to further review and amend the bill.  The exact time and location is to be determined.

Proposed Legislation – Property Insurance Loss Appraisers

Included with this e-mail is a summary of the proposed legislation, along with a draft of the bill.  This bill will also be reviewed in the workshop scheduled for November 5, 2007.


The next Task Force meeting will be held on either January 28 or 29, 2008 in Jacksonville.  The exact time and location is to be determined.  The agenda will be fairly aggressive—Chairman Milligan would like to cover the following items:

• Underwriting and Consumer Care Operations;
• Claims Reporting;
• Recent Florida Supreme Court Rulings on Flood versus Wind Coverage;
• Agent Training;
• Commercial Non-residential and Residential Multi-peril Coverage;
• Internal Audit Report;
• Consolidation of Personal Lines Account; and
• Evaluation of Operations.


The above information is intended to be a general summary of the discussions that took place during the Task Force meeting.  It is neither intended to provide specific analysis nor should it be relied upon in making individual business decisions, specific in nature.

Should you have any questions or comments regarding this information, please feel free to contact this office.