Tuesday, April 24, 2018
Business

Confidence fades as Citizens Property antics become public

Citizens Property Insurance was created in 2002 by the state to protect Floridians unable to find private insurance coverage.

Now who will protect us from Citizens' bad behavior?

A series of remarkably poor decisions — from flamboyant executive travel to canning the very staff investigating ethical lapses at the insurer — leaves Citizens in a wretched position with both its own beleaguered policyholders and a frustrated public. The few shreds of credibility still attached to Citizens may soon be in jeopardy as more dirt comes to light from a 73-page internal draft report detailing gross improprieties, sexual misconduct and fat severance checks for disgraced Citizens employees.

Even the failure of the draft report, gutted by Citizens, to see the light of day is outrageous. Thanks to reporting by Toluse Olorunnipa of the Tampa Bay Times/Miami Herald bureau in Tallahassee, details of the document are now public.

Citizens president Barry Gilway last month terminated the four staff investigators working on this report, buried the report findings and shuttered Citizens' "Office of Corporate Integrity." After newspapers criticized these events, Gilway said better qualified fraud experts would replace the four and bemoaned the media's misrepresentations. As he stated in his Oct. 26 letter in the Palm Beach Post:

"A review showed that the former Office of Corporate Integrity lacked financial forensics experts who could identify and initiate investigations of internal fraud or policy violations. Most complaints investigated turned out to be workplace complaints and employee performance issues more appropriately handled by management and Employee Relations."

If Gilway suggests the details about Citizens in the report (much of it happened before Gilway arrived) is the work of such inadequate watchdogs, what would a high-powered probe discover?

Now Gilway is set to meet today with the insurer's board of directors to discuss this matter. Citizens chairman Carlos Lacasa says restoring public confidence is a priority.

One meeting may not do it.

As reported in the Tampa Bay Times and other Florida newspapers, the report finds:

• Citizens underwriting vice president Paul Palumbo received severance pay of more than $80,000 in 2010 as the company "closed without investigation" an inquiry into "inappropriate behavior and sexual harassment."

• Chief administration officer Susanne Murphy identified herself as the company's corporate counsel but was not a member of the Florida Bar. After company officials changed documents relating to her employment history, a 2010 Citizens review recommended no action.

• Two intoxicated management-level employees "removed their bras in front of employees" in a Coyote Ugly bar incident in Ybor City in 2009. Company officials advised counseling.

We can skip the part about the adult novelty business.

Gov. Rick Scott has asked state Inspector General Melinda Miguel to investigate the firings of the four Citizens Property investigators.

How telling that Citizens was created as insurer of "last resort." The definition of "last resort" is "a means to an end adopted only in desperation."

Robert Trigaux can be reached at [email protected]

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