Audit Raises Questions About Accuracy of Louisiana Citizens’ Records

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The Louisiana Legislative Auditor’s Office said an audit of Louisiana Citizens Property Insurance Corp. for 2008 found enough problems that it could not issue an opinion on the accuracy of the insurer’s records.

Citizens’ management concurred at least in part with most of the findings and said corrective action was being taken, according to an Associated Press report.

The report found, among other things, that access to Citizens’ computer systems lacked the proper controls, which could open the door for potential fraud, and that the insurer failed to take enough steps to make sure that policy applicants were eligible for coverage.

In addition, the audit found problems in the program intended to move Citizens policyholders to private companies. Instead of taking bundles of policies, private companies were allowed too much leeway in the selection of policyholders they wished to assume, the report said.

Citizens said it believes its program meets the intent of the law and is successfully steering its policyholders to private insurers.

Citizens CEO John Wortman, has said he hopes the company will be down to 120,000 policyholders by the end of 2010. It had 167,000 policies in 2007 and cut the number to 149,000 by the end of 2008. That number fell to about 131,000 last year, Wortman said after a recent meeting of Citizens’ board.

Wortman also said Citizens has been taking steps to fix the problems with its computer systems.