Citizens offers cheaper rate option with no fanfare posted on 5/20/13

by TOLUSE OLORUNNIPA | HERALD/TIMES TALLAHASSEE BUREAU

TALLAHASSEE -- Last year, the Florida Legislature mandated Citizens Property Insurance Corp. to offer a cheaper, more limited coverage option to homeowners, potentially saving them up to 70 percent on their premiums.

Citizens, which is trying to raise its prices in order to shrink in size, grumbled about the mandate for months, and has put up several roadblocks to keep people from signing up for the cheaper coverage. Company officials say the so-called HO-8 policy offers dangerously limited coverage that could harm unsuspecting consumers.

“They’re going to flock to Citizens to buy this piece of garbage policy,” Citizens Consumer Services Committee member Greg Rokeh said in December, before throwing up his hands in disgust.

The state-run insurer has been successful in making sure that didn’t happen. In the three months since the so-called HO-8 policy has been available, only 47 people have signed up for it statewide. Many say they have never heard of the new policy option, which would reduce their premiums significantly at a time when homeowners are struggling to pay the rising cost of insurance.

Citizens has done little to inform homeowners about the HO-8 option and has placed several restrictions on who can sign up for it. The company has also issued a strongly-worded advisory to insurance agents warning them they could be sued after offering the policy to homeowners.

The company has argued that the cheaper coverage option would attract people to Citizens at a time when the state-run insurer of 1.3 million policies is furiously trying to downsize. Company officials have also said the HO-8 policy’s limited coverage would end up hurting consumers, who might not be privy to what kind of insurance they are signing up for until it’s too late.

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Florida's storm insurance fund in good shape posted on 5/16/13

by GARY FINEOUT | AP

TALLAHASSEE - Florida is heading into a new storm season with some good news for once.

The state-created fund that backs up private insurers in Florida is in the best financial shape it has been in years -- maybe the best since it was created in 1993.

And new estimates drawn by financial consultants and Wall Street firms suggest that the fund should be able to borrow enough money to cover its obligations for the coming hurricane season, which starts June 1...

The situation still isn't perfect: One big storm could wipe out the fund and leave it short of money the next year.

That could prompt insurers to stop writing policies and damage the state's economy.

Still, this year's situation is much better than it was during the height of the Great Recession, when convulsions in the financial industry created fears that the fund would not be able to pay off its claims...

The fund has to borrow money if claims exceed its cash reserves.

That money is then repaid by placing a surcharge, sometimes dubbed a hurricane tax, on nearly every insurance policy in the state, including those for vehicles.

Floridians are still paying a surcharge placed on insurance bills due to Hurricane Wilma in 2005.

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Jobless benefits to be cut by weeks posted on 5/15/13

by Jim Stratton | Orlando Sentinel

Florida will soon slash four weeks of unemployment benefits from laid-off workers nearing the end of their eligibility.

The reduction is happening because of the so-called sequestration, the automatic federal budget cuts that began in March. Up to 100,000 laid-off workers could have their benefits cut off.

Florida's maximum weekly payment is $275 per week, so a four-week cut could cost the jobless up to $1,100. The average person will lose about $924, the state said.

The cuts affect workers in or entering the third tier of federally funded payments, who will get just three weeks of benefits instead of the seven to which they are now entitled.

They will take effect later this month, according to the Florida Department of Economic Opportunity.

The state says the cuts would hit workers collecting unemployment through the Emergency Unemployment Compensation program. Those are federally funded benefits that kick in once a worker exhausts 19 weeks of payments made by the state.

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2013 Session Summary: Insurance posted on 5/9/13

by Contribution Link

A good session for the insurance industry was set up when committee memberships were announced, as pro-industry members made up most of the House and Senate insurance panels.

But a bright start to efforts to bring big changes to Citizens Property Insurance Corp., the Florida Hurricane Catastrophe Fund and the Florida Insurance Guaranty Association and to place firm caps on repackaged drugs to reduce workers’ compensation costs gave way to compromise deals and stall tactics that watered down or blocked comprehensive changes. Instead of the robust reforms envisioned by the pro-industry panels, incremental changes to the state’s insurance entities and a modest cap on repackaged drug costs will make their way to Gov. Rick Scott’s desk.

Lawmakers also grappled with new insurance issues that popped up during session.

After the personal injury protection (PIP) auto insurance changes last year, legislators thought they were done with the issue this year, hoping to watch the market respond to the new law. A circuit court judge, though, imposed an injunction against the law, stripping it of many of its cost-saving measures. That led some senators to look at moving to a mandatory bodily injury insurance system and doing away with the no-fault PIP system.

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Inspector General: No 'evidence' of retaliation in abrupt firings of Citizens investigators posted on 5/8/13

by TOLUSE OLORUNNIPA | HERALD/TIMES TALLAHASSEE BUREAU

Last October, four corporate investigators at Citizens Property Insurance Corp. were called into a conference room, asked to sit down, and told their services would no longer be needed.

The bearer of the bad news was one of several company executives who had been implicated in a six-month investigation into corporate misbehavior, large severance packages and sexual harassment at the state-run insurer.

The employees claimed that their abrupt firing was an act of revenge but a new report from the state’s chief Inspector General did not find direct evidence of retaliation.

“Based solely on the evidence, the evidence did not support a conclusion that retaliation was the reason for the decision to disband OCI,” wrote Melinda Miguel, chief inspector general of Gov.Rick Scott, in a draft report obtained by the Herald/Times.

Citing the high standards needed to prove retaliation, Miguel's report said the fired investigators did not have enough clear evidence to do so.

It does point out, however, that the allegations of poor performance Citizens used in firing the investigators appeared to come out of the blue. The investigators, who made up the Office of Corporate Integrity, were not accused of poor performance until after their inquiries led to the abrupt resignation of a top executive, tough interrogations of several others and several policy changes.

According to report, Citizens President Barry Gilway cited “performance issues that were not raised prior to disbanding OCI nor supported by other decision-makers involved in the decision.”

The corporate investigators each said they were surprised by their abrupt firing and did not see it coming. Gilway said Tuesday that the inspector general report vindicated the company, which claimed that the firings were part of a restructuring effort to beef up fraud detection...

The company will have its own inspector general later this year under a law that passed the Legislature last week.

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