Successful International Negotiations Substantially Reduced Citizens Property Insurance Assessment Load, CEO Gilway Tells Florida Cabinet
Aug 19, 2014
As part of the Florida Cabinet meeting agenda today, August 19, 2014, Citizens Property Insurance Corporation (“Citizens”) President and CEO Barry Gilway was asked to provide an update on the State-run insurer’s travel expenses and related policies.
To view his presentation, click here.
Yesterday, the Palm Beach Post had reported that the Office of Florida Governor Rick Scott asked Mr. Gilway to appear before the Cabinet to explain why a 2013 recommendation to ban overseas travel by Citizens’ Board of Governors (“Board”) members had been disregarded. A major issue of contention was $48,000 in resulting expenses generated by several Citizens Board members and executives during the past year.
At today’s Cabinet meeting, Mr. Gilway reviewed policy changes that had been instituted by Citizens in response to criticism on past spending described as “lavish.” He also discussed why international travel is necessary for Citizens. For example, partially as a result of negotiations conducted in other countries, Citizens’ assessment load has been reduced over the past four years from approximately $11.61 billion to $2.29 billion–a decrease of 80 percent.
Among the documents in Mr. Gilway’s presentation substantiating his explanation was a letter from Association of Bermuda Insurers and Reinsurers President Brad Kading, who described his organization’s members as ” . . . generally constrained from doing business in the United States.” Mr. Gilway also said that Internal Revenue Service rules require some types of risk transfer to be negotiated outside of U.S. boundaries
To address spending on travel deemed as excessive, Citizens implemented State of Florida-prescribed travel guidelines in April 2013, which Mr. Gilway said effectively reduced these expenses.
After listening to Cabinet members’ concerns today, Mr. Gilway emphasized the critical need for international travel by himself and Citizens’ Board Chairman to effect positive reinsurance outcomes.
Insurance-Related Appointments Confirmed
As part of the State Board of Administration (“SBA”) agenda heard during today’s Cabinet meeting, Dr. Lorilee Medders was re-appointed without comment or objection as 2014-2015 Chair of the Florida Commission on Hurricane Loss Projection Methodology.
The Cabinet also confirmed with no comment or objection Florida Chief Financial Officer Jeff Atwater’s recommendation of Alan B. Edwards as the insurance agent member of the Florida Hurricane Catastrophe Fund Advisory Council. Florida law requires the SBA to appoint an Advisory Council consisting of nine members, including one insurance agent. Members serve at the pleasure of the State Board of Administration.
To view all materials related to these appointments, including resumes, recommendation letters and an updated list of both panels, click here (begins on page 72).
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