Miami lawmaker calls on regulators to probe Citizens Insurance
A Miami lawmaker is putting more pressure on Citizens Property Insurance, asking the state insurance regulator to conduct a top-to-bottom probe of the company’s business practices.
Rep. Frank Artiles, R-Miami, wrote a letter to Insurance Commissioner Kevin McCarty on Friday, calling for a “Market Conduct Examination” on Citizens.
Such an examination would look at nearly every aspect of the company’s operations, including its personnel management, financial books, customer service and claims processing.
Artiles, who has been a constant critic of Citizens as the insurer has grown more independent from the Legislature that created it, said recent allegations of corporate misconduct make such a probe necessary. Corporate investigators at Citizens were recently fired after uncovering executive scandals.
“It is imperative that all Floridians and Citizens’ policyholders are protected, The Governor and Cabinet and entire Florida Legislature are responsible for what is happening at Citizens,” said Artiles. “Clearly, the Board of Citizens seems to be asleep at the switch, disinterested or indifferent to the daily operations of the organization. They have shirked their fiduciary responsibilities.”
Citizens has come under fire in recent months for reports of exorbitant spending by execs and various corporate allegations ranging from sexual harassment to altering incriminating documents to covering up scandals with big severance checks.
At a special hearing called to address some of the issues earlier this week, Citizens President Barry Gilway said the company was working to fix the problems. The board echoed those sentiments.
Artiles, who is also a public adjuster, is particularly concerned that Citizens is spending a large amount of money on hiring law firms to fight against homeowners’ insurance claims in court.
Artiles was not assigned to the Subcommittee on Banking and Insurance, which has no members from Miami-Dade County. On Tuesday, that committee will hear a presentation by Citizens on a plan to loan $350 million out of the company’s surplus to private insurers who agree to take over policies.
He is calling on the Office of Insurance Regulation to investigate that loan program as part of the market conduct examination as well. Such an examination would add to a growing list of probes into the state run insurer.
Gov. Rick Scott has called for two investigations into Citizens in the last three months, and top leaders in the Florida Legislature have expressed concerns about the company's approval of the $350 million loan program.
Artiles’ press release is here.
The letter to Commissioner McCarty is here.