Audit Details Problems at Citizens Property Insurance

State-created Citizens Property Insurance has worked to come up with rules that will help its employees avoid conflicts of interest, but still needs to do more in that area, including developing a policy for picking contractors, an audit has found.

The state auditor general, an independent auditor appointed by the Legislature, said in an audit released Thursday that Citizens needed a description of the personal relationships that should be considered a conflict of interest, better requirements for filing annual conflict of interest forms, and more guidance to employees on what gifts they can take.

Citizens also needs better purchasing policies and procedures to make sure vendors are selected properly, the auditor found. It also needs to do more in the way of checking the background of its employees.

But the audit noted that the company is making some changes in response to criticisms about its employees’ ethics and the way it has handled its claims.

Citizens was established by lawmakers to provide property insurance to people who can’t get it on the private market.

Citizens was heavily criticized for its handling of claims from the 2004 hurricanes, which led to the audit.

Citizens also faced allegations that a former officer of the company solicited bribes and two other executives violated conflict of interest rules by creating a separate company to do business with Citizens while they were still on the payroll, leading the auditors to also look at the company’s standards for conduct by officers and employees.

Citizens, which has more than 800,000 policies in force, had to pay out more than $2.5 billion for the nearly 125,000 claims filed for damage in the 2004 hurricanes.

Florida CFO Tom Gallagher, who has been a staunch critic of Citizens, said that report will boost his effort to get lawmakers to make changes at the insurer. Gallagher, a Republican, is running for governor.

“I am pleased that many of the reforms I have recommended of Citizens over the last year are now also being supported by the Auditor General, including stricter ethical standards, and greater financial oversight and accountability,” Gallagher said.

Citizens released a statement saying it was “gratifying to see that the Auditor General’s report recognizes the significant improvements that Citizens has made in its operations.

“The results of this audit confirm that Citizens has taken and continues to take all the right steps to improve customer service.

Topics Property