Reasons listed in the average Citizens Property Insurance denial letter have been getting more ridiculous, the policies are slashing coverage, and rates for most of Citizens’ 1.4 million customers are soaring. These issues alone are enough for Floridians to lose confidence in this state-created not-for-profit, tax exempt governmental entity, but there is even more outrageous behavior going on behind the scenes at Citizens.
The internal investigators with Citizens’ Office of Corporate Integrity unearthed scornful improprieties within the corporation, detailed in their 73 page report. Las month, however, those same investigators were terminated and the entire office of “Corporate Integrity” was shut down.
The Miami Herald details the allegations that have come to light from the terminated investigators in its recent article, Corporate Cauldron of Misconduct Alleged at Citizens Property Insurance.
- Susanne Murphy, Chief Administration Officer at Citizens, served as a legal advisor to the company for years, despite not being a licensed attorney in Florida. When it was discovered, top officials at the company altered incriminating documents and allowed Murphy to resign in August while continuing to receive salary and benefits until December.
- Citizens paid more than $80,000 in severance to an underwriting executive accused of having an affair with a subordinate, and helped him receive unemployment benefits after he resigned from the company. The company declined to pursue an investigation.
- Citizens executives showed favoritism to certain employees, firing one employee who used company resources to promote a line of sex toys, while barely disciplining an executive who drunkenly slipped off her bra during a company retreat and promoted a side-business on company time.
- The company outsourced several internal investigations to private law firms. In some cases, the firms cleared high-level employees of charges without considering crucial pieces of incriminating evidence.
Governor Rick Scott has ordered the chief inspector general, Melinda Miguel, to investigate why the four corporate watchdogs were suddenly terminated from Citizens last month. According to the Herald, “Miguel is likely to find that Citizens’ investigators had drafted an explosive report before they were terminated, documenting evidence of botched internal investigations, employee favoritism and generous severance packages for executives involved in office scandals.”
Floridians need to be aware and educated about these allegations because the funds for this “insurance corporation” come from the insurance premiums we pay. Regardless of whether you have another insurance company, we all pay for Citizens to some extent. Check your premium statement to see how much you have contributed.
As for employee favoritism, the OCI report uncovered that more than $750,000.00 was spent to keep certain employees quiet. Citizens, who says it is committed to ensuring it follows the highest level of ethics, will have a lot of explaining to do. Citizens President, Barry Gilway has requested a special hearing on these issues. The evidence regarding the alleged $750,000.00 in “hush money” has to cause reasonable minds to question the claims handling practices Citizens may have been trying to keep its employees from airing. Perhaps Investigator Miguel can uncover detailed information on how many claims were handled in a way prejudicial to the policyholder and the correlation between denied/mishandled claims and the large severance payments issued. I have a funny feeling connecting the dots might be done in the dark.
To learn more about Citizens at work , check out our prior posts:
- Is Citizens Board of Directors Violating Florida Law?
- Citizens Calls it an Inspection, Floridians See Higher Premiums
- Differing Perspectives on Citizens Rate Increases
As always, stay tuned for more updates.