Hundreds of thousands of Florida homeowners are receiving notices from their insurance carriers stating, “You are paying more for your policy due to an emergency assessment from Florida Citizens.”
Florida Citizens Property Insurance Corporation is the state-run insurer that provides insurance to individuals who are unable to secure coverage through other insurance carriers. Those covered are often in high-risk or coastal areas. The emergency assessment is “necessary to enable Florida Citizens to pay claims they received from past hurricane seasons.” The emergency assessment is for the Florida Hurricane Catastrophe Fund (FHCF). The rate increase was passed in July, 2012. According to SunSentinel.com, “Personal residential policies would receive a 10.2 percent statewide average increase, including 10.5 percent for homeowners and 9.7 percent for renters.”
For one homeowner who contacted Watchdog Wire – Florida the emergency assessment on their $160,000 home was $200 per month or $2,400 a year.
Florida has many senior citizens who live on fixed incomes, have seen their investments dwindle and property values drop. A rate increase of this magnitude is problematic for many others who have homes in Florida but live in other states.
To make matters worse it appears that senior officials at Florida Citizens have been spending lavishly while passing on the costs to Florida homeowners. The Florida Citizens website states, “We will demonstrate steadfast adherence to our values and ethical code of conduct.” However, after combing through hundreds of expense reports from the last three years, a team of writers from the Tampa Bay Times and Miami Herald found executives at the state-run insurance company were living the high life on the company’s dime.
According to investigative reporters Susan Taylor Martin, Jeff Harrington and Toluse Olorunnipa from the Times/Herald, “Chief financial officer Sharon Binnun spent at least $70,000 on travel from January 2011 to June 2012. During trips to Manhattan, Binnun stayed at hotels that cost up to $500 per night. In an April business trip to Bermuda, she upgraded to ‘gold’ status at the Fairmont Hamilton Princess, bringing the cost of her room to $633 per night.”
“Former Citizens president Scott Wallace, general counsel Dan Sumner and board chairman Carlos Lacasa indulged in meals that often cost three times the limit put on rank-and-file staff. Wallace flew first-class to London for a meeting with insurers. Travel costs for Citizens — a government corporation run by a board appointed by Gov. Rick Scott and other state leaders — are projected to more than double this year, from $1.5 million to $3.4 million,” note Martin, Harrington and Olorunnipa.
Florida Senator Mike Fasano is having none of these shenanigans. He has sent a letter to Governor Scott and the cabinet asking for an investigation of Florida Citizens. The Tampa Bay Times reports, “Citizens’ top executives and board members have been shameless in the way they lavishly spend tax dollars on travel and related expenses,” Fasano, R-New Port Richey, said in a statement. “While crying poor mouth they stay in posh hotels, eat expensive meals, and engage in international travel. While so many of their customers are struggling to cut their personal budgets so they can pay their ever increasing premiums, Citizens’ higher-ups are living high on the hog on the public dime.”
This prompted a letter from Barry Gilway, the new President/CEO and Executive Director of Florida Citizens, stating, “As a government entity operating in an international industry, Citizens walks a fine line between fiscal stringency and the need to conduct business internationally on behalf of all Floridians. We also recognize that there is always is room for improvement and that we have a duty to achieve efficiencies in everything we do, whether in Tallahassee or London.”
The next Cabinet meeting chaired by Governor Scott is scheduled for September 18, 2012. Some have questioned the fiscal soundness of Florida Citizens should a major hurricane hit the state.