Does Citizens Management Think of Itself as a Private Insurer Rather Than a Governmental Entity?

A governmental entity is fictional in the sense it is a creature created by law. Corporations are similar, but they may act for personal gain, whereas governmental entities are supposed to act "for the people." Citizens Property Insurance Corporation appears to claim in court arguments that it is a governmental entity. Yet, when it comes to acting as an insurer, it certainly wants to be free of governmental constraints.

A good example of this is found in a recent article, "Georgia Software Company Sues Citizens Property Insurance Over No-bid Deal." It was reported that:

A Georgia software company has sued Citizens Property Insurance Corp. saying it broke the law when it awarded a $60 million contract in late October without soliciting competitive bids.

SagoTec Group is challenging Citizens’ agreement with Inspection Depot to reinspect policyholders’ homes that have wind mitigation credits.

Citizens says there is an emergency need to verify such credits because they account for $700 million in premium discounts annually for the state-run insurer. If a re-inspection shows the credit is undeserved, Citizens, the state’s largest insurer, could recoup substantial revenues.

The issue of wind mitigation credits and how it impacts rates was never a secret or an "emergency." It was a normal operational issue that should have been developed and bid upon. Successful or not, I applaud the lawsuit because it will force Citizens management to act as a governmental entity and comply with the law. The Citizens Board of Directors should make its own determination of this issue as well, regardless of whether it means there is accountability for breaking the law.

The issue of accountability is fundamental to most of us. Why have rules if they can be broken without consequence or accountability? Currently, Citizens has no financial accountability for delayed and intentionally wrong claim handling as private insurance companies do. See my earlier post, Citizens Property Insurance Corporation is Shielded by Sovereign Immunity from Bad Faith Claims.

Our legislature should follow the lead of State Senator Don Gaetz and correct this. It is simply wrong for Citizens claims managers to have no accountability. It already has an unfair advantage in the marketplace with private insurers on the rate structures, it should not have an economic incentive to break the law and promote abusive claims practices against its own customers.