- Florida's Citizens Board of Governors Reviews 2014 Accomplishments; Approves 2015 Budget, Risk Transfer and Pre-Event Liquidity Program
- January 2, 2015
- Law Firm: Colodny Fass P.A. - Fort Lauderdale Office
Florida's Citizens Property Insurance Corporation ("Citizens") Board of Governors ("Board") met in Winter Park, Florida today, December 10, 2014.
In his report, Board Chairman Chris Gardiner said that Citizens has had a very productive year.
Citizens' President and CEO Barry Gilway echoed that, adding that Citizens has met nearly all of its yearly strategic objectives. Among these have been successful depopulation programs, creation of Citizens Clearinghouse and improvements in claims management.
He noted that 2014 marks the ninth year in which no catastrophic storm has impacted Florida, and that Citizens has benefited greatly from the resulting market conditions.
He added that the Clearinghouse was developed and on time and on budget. He also reported that, during the year, Citizens has engaged in numerous settlement agreements with law firms to close open claims.
Altogether, Citizens now has 750,000 policies, translating into a 51 percent reduction in overall policy count.
Citizens' Chief Financial Officer Jennifer Montero reviewed the State-run insurer's 2015 budget, which calls for reductions in Citizens' overall spending, while consolidating operations and cutting the number of contingency employees. The Budget, which was approved by the Board, also reflects recent upgrades in computer technology following a seven-year effort that culminated this week with the transfer of all of Citizens personal lines claims and underwriting duties into a single, integrated computer system.
Ms. Montero also explained Citizens' 2015 risk transfer plan and pre-event liquidity program, the latter which includes the authority to acquire up to $1 billion in pre-event financing to cover a 1-in-100 year storm, if necessary. Both items were approved by the Board.
Her presentation touched on the defeasance of Citizens' Series 2007A post-event bonds, followed by an investment policy analysis with corresponding recommended changes, which the Board also approved.
Finally, Ms. Montero reviewed Citizens' Financial Statements through September 30, 2014, which included an analysis of sinkhole claims showing that Citizens' losses in this area continue to decrease. According to Mr. Montero, Citizens is in the best financial position in its history at this time.
Citizens' Chief Risk Officer John Rollins reported on recent product changes designed to return Citizens to its original purpose as Florida's insurer of last resort. Among the changes approved by the Board included the restoration of optional coverage for scheduled, specific detached structures of up to 70 percent of a home's Coverage A value, and the modification of current contract language excluding attached structures to utilize more commonly understood terminology.
Citizens' Chief Claims Officer Jay Adams presented a new software program to help manage claims that will include the monitoring of legal fees and cross-file billing issues. The Board approved the software purchase, as well as two Invitations to Negotiate, one relating to Citizens' Special Investigative Unit's work with fraudulent insurance claims, the other relating to mobile home demolition services.
In his report, Citizens' Vice President for Consumer and Agent Services Steve Bitar forecast that depopulation efforts are expected to decline as more premiums come into line with a those of a true residual market.
Vice President of Communications, Legislative and External Affairs Christine Ashburn said that she expects depopulation to be an issue during the 2015 Florida Legislative Session.
Following the Board meeting, the Citizens Florida Market Assistance Plan ("FMAP") Board of Governors met briefly.
The next FMAP Board meeting is scheduled for March 17 and 18, 2015.