Sen. Fasano calls for Cabinet hearing on Citizens’ travel spending

Aug 31, 2012

The following article was published in The Florida Current on August 31, 2012:

Sen. Fasano calls for Cabinet hearing on Citizens’ travel spending

By Gray Rohrer


Sen. Mike Fasano, R-New Port Richey, sent letters to Gov. Rick Scott and three Cabinet members Friday, urging them to hold a public hearing to address excessive travel spending by Citizens Property Insurance Corp. officials.

“Citizens’ top executives and board members have been shameless in the way they lavishly spend tax dollars on travel and related expenses. While crying poor mouth they stay in posh hotels, eat expensive meals, and engage in international travel,” Fasano said in a prepared statement.

The letter comes after a recent Miami Herald article detailing travel expenses by some Citizens board members and staffers for ritzy hotel stays and exorbitant meals during trips to London and Bermuda to meet with reinsurance companies.

Citizens is a state-run property insurer funded jointly by premiums and taxpayer money. Accounts of expenses such as $600 per night hotel stays and $234 dinners are particularly wince-inducing in light of Citizens’ efforts to scale back coverage – with no corresponding drop in premium – on secondary structures and older homes.

In a letter to Scott  late Friday in response to Fasano’s missive, Citizens CEO Barry Gilway contended that the travel is necessary to achieving the best price for reinsurance.  He claimed that the agency’s corporate travel costs are 0.17 percent of overall operating expenses, but according to Citizens’ budget for 2012, its travel budget of $3.39 million is a 132 percent increase over the previous year and comprises nearly 2 percent of its operating costs.

Gilway did say he is conducting an expense review “which will include establishing more stringent standards regarding hotel and restaurant charges, wherever possible, to benefit our policyholders and the people of Florida.” An overview of travel policy and recommendations will be presented at Citizens’ board of governors meeting on Friday, he wrote.

Scott pushed Citizens board members last fall to look for ways to reduce its exposure and the likelihood of assessments on all policyholders, even non-Citizens customers, in the event of a mammoth hurricane striking the state. Citizens has also conducting a rigorous inspection program that has more often than not reduced mitigation credits for homeowners and boosted their premium.

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