Florida Gov. Scott Troubled by Firings at Citizens Property Insurance

Posted by on Oct 29, 2012 | 0 comments

A move by Florida’s largest property insurer to dismiss employees responsible for investigating wrongdoing drew criticism last Thursday from Gov. Rick Scott.

Scott, in a strongly-worded letter to the president of Citizens Property Insurance, called the decision “troubling” because it comes while the governor’s inspector general is reviewing reports of lavish travel expenses by top executives at the company. Scott ordered the probe after news reports detailed expensive hotel stays and flights abroad.

The state-created Citizens has nearly 1.48 million policyholders, including many people who live in the state’s heavily populated coastal areas. Scott and others have pressured the insurer to shrink in size because the company has the power to put a surcharge on insurance bills if it can’t cover claims.

The Tampa Bay Times and Miami Herald first reported earlier last week that Citizens was closing its Office of Corporate Integrity and had given termination notices to those employees working in the office. The office handled complaints of employee fraud or misconduct.

Citizens officials say they are replacing the employees with accountants who are more qualified to detect financial fraud.

The governor wrote in his letter that while he agreed with the need to run an efficient operation, he questioned removing the employees before their replacements have been hired.

“An effective compliance system cannot be achieved without an adequate number of independent, highly trained professionals,” Scott wrote. “To ensure that all necessary safeguards are in place, I urge you to use greater caution with future modifications affecting internal investigations, audits and compliance.”

Christine Turner Ashburn, a spokeswoman for Citizens, said the insurer understood Scott’s concerns and that the company was moving quickly to replace the four employees. Ashburn said other auditors at the company would handle work that had been done by those who were let go.

“We are confident that nothing will fall through the cracks as we make this important transition,” she said in an email response.

Hours before Scott put out his letter, Citizens had put its own release where it contended that the media had mischaracterized the changes.

“We believe these changes strengthen our ability to ensure Citizens employees operate with the highest level of integrity,” said Citizens President Barry Gilway in the release.

The flare-up over Citizens came on the same day that the Office of Insurance Regulation announced that it had approved the removal of up to 100,000 policies from Citizens to two domestic insurance companies. Heritage Property & Casualty Insurance and American Integrity Insurance have agreed to take over the policies. Under Florida law, Citizens policyholders have 30 days to accept or decline the offer.

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