Error leads Citizens Property to offer credit monitoring to customers

Published May 1, 2015

Nearly 20,000 policyholders of Citizens Property Insurance Corp. will be offered a year of free credit monitoring because some of their information was sent to a wrong address.

The Citizens Board of Governors, in a teleconference Thursday, approved up to $640,000 in emergency funding to cover the cost of providing credit oversight from the information-services company Experian.

The final cost will depend on how many policyholders take advantage of the offer.

The data release does not meet the definition of a security breach under Florida law. However, Citizens chief legal officer Dan Sumner told the board the offer is "prudent."

From December through March, some policyholder "declaration" pages were mailed to incorrect addresses. Most went to an incorrect mortgage company, while others were mailed to a pair of policyholders.

Citizens spokesman Michael Peltier said the two policyholders "returned the declaration packages unopened," but the documents received by a mortgage company have yet to be retrieved and some may have already been destroyed.

Declaration pages contain policyholders' names, addresses, telephone numbers, policy numbers, premium amounts, coverage limits and property mortgage loan numbers. The pages do not include Social Security numbers, credit card or payment information or passwords and user names for online accounts.

Kelly Booten, Citizens' chief systems and operations officer, said as a security precaution the company has reduced the number of people who can access the data entry changes that were tied to the errors.

Affected policyholders have until July 31 to sign up for the service, according to information Citizens CEO Barry Gilway provided to the board. But Peltier said the deadline will vary depending on when customers receive the notification letter, which will be sent in several bulk mailings.

The state-backed insurer will have to pay the credit-monitoring service only for policyholders who take advantage of the offer. The emergency funding request comes to $32.02 per affected policyholder, according to Citizens records.

The agenda item for the emergency funding noted that, historically, the redemption rate for such offers is 12 percent, which would put a final cost near $77,000.

During the teleconference, the board also approved a $3.9 billion risk-transfer package for the 2015 hurricane season. The package is expected to bolster Citizens' surplus and eliminate the risk of potential assessments on Florida policyholders if a "1-in-100 year storm" hits Florida. The package includes $1.855 billion for traditional reinsurance — insurance for insurers — and $2.05 billion in capital-market catastrophe bonds. The total is a $636.5 million increase from the coverage Citizens secured for the 2014 hurricane season.