TALLAHASSEE, Fla. – Dec. 11, 2013 – Citizens Property Insurance Corp. announced that its clearinghouse to compare property insurance costs will start up later than the planned Jan. 1. Florida government also announced that it hired a watchdog for Citizens, whose job will be to monitor how the Florida-owned insurer operates and spend money.
A three-week delay has been set for the rollout of the legislatively approved insurance clearinghouse designed to help reduce the number of homeowners’ policies in Citizens. The company said postponing the rollout is being done, in part, to respond to questions about policyholder privacy when the state contacts private insurers about applications.
“When we introduce this, we want to make absolutely sure that it’s going to be successful,” Citizens President and CEO Barry Gilway told the Senate Banking and Insurance Committee on Tuesday. “By moving this date by three weeks, it gives us the opportunity to conduct far more user-acceptance testing,” and a higher degree of confidence “that it will operate as advertised.”
The clearinghouse system had been scheduled to begin comparing new policies on Jan. 2. It’s now expected to go into use Jan. 27.
Through the clearinghouse, all new applications to Citizens will be shopped to private firms. If coverage cost is within 15 percent of Citizens’ premium, the policy would go to the private carrier. For Citizens customers, renewals will have to go to the private market if comparable coverage is found at or below the state-backed insurer’s rates.
The clearinghouse was part of a sweeping insurance package (SB 1770) approved by legislators during the 2013 session. In August, the Citizens board approved a five-year contract with Bolt Solutions Inc., to design the software for the clearinghouse. The contract, which has an option for an additional five years, could total $44.9 million over the decade.
Jay Neal, director of the advocacy group Florida Association for Insurance Reform, prefers Citizens takes its time setting up the system to ensure consumers are also able to judge the different companies that may be competing for their business.
“When these offers come back, it’s not just important that the consumers know the policies are similar, consumers need to know other things, they need to know the relative financial strengths … they need to know if the companies are going to be around when the wind blows,” Neal said. He expects even with the extra time there will be “bumps” for consumers. But he remains “cautiously optimistic” the system will work.
Gilway said after a state Cabinet meeting on Tuesday that the clearinghouse system “is far more complex than Healthcare.gov.”
“The property casualty product is far more sophisticated than the health care (market),” Gilway said. “The challenge is that every single company is different, and the challenge with every company is different. Some companies use credit scores; some don’t. We’re trying to come up with a system that meets the needs of every carrier across the board.”
The inclusion of renewals of Citizens policies into the clearinghouse remains on schedule to begin July 1.
Bruce Meeks, a Tallahassee attorney who spent nearly eight years as an inspector general with the State Board of Administration, has been offered a similar role to serve as the new watchdog at Citizens Property Insurance Corp. Meeks also worked under former Democratic Attorney General Bob Butterworth, serving as personnel director from 1995 to 1998 and as executive deputy attorney general until 2002.
Gov. Rick Scott and the Florida Cabinet agreed Tuesday to offer the Citizens inspector-general position advertised for up to $200,000 a year to Meeks.
“The inspector general is going to hold Citizens accountable,” Scott said after the meeting. “We’ve got have Citizens held accountable. We have to watch how they spend the money.”
The position, created by the Legislature in the spring as part an overhaul of the state-backed Citizens, was included in the package because of concerns raised by Scott and others about travel spending by Citizens employees and about the firing of the agency’s Office of Corporate Integrity.
Meeks, a co-manager and partner with the Law Offices of Roberts & Meeks, was not immediately available for comment Tuesday.
Lisa Miller, a former deputy insurance commissioner who now lobbies for insurers, said she didn’t know Meeks, but that just having the position gives Citizens more internal oversight.
“You can’t have enough eyes in this organization,” Miller said. “Citizens, as we heard today, is improving, going well, and we want to continue that momentum. I think this inspector general can just see things in a different light. There is no downside to that.”
Insurance Commissioner Kevin McCarty said Scott’s goal is to “have Citizens held to the same standards as other state agencies.”
Source: News Service of Florida, Jim Turner