By Marianela Toledo | Florida Watchdog
MIAMI — Fed up with the tales of waste, fraud and abuse, two state lawmakers want to create a new position for an independent inspector general who would keep tabs on Citizens Property Insurance Corporation, the state-subsidized property insurer of last resort.
The legislation was introduced last week by state Rep. David Richardson, D-Miami Beach, and state Rep. Frank Artiles, R-Miami, and will move forward to the Insurance and Banking Subcommittee.
“Citizens does not answer to anyone. It doesn’t answer to the Legislature, it doesn’t answer to the Senate,” Artiles told Florida Watchdog in Sept. 2012.
“The board has expanded its powers. They’re not accountable to anybody,” he said. “Nobody controls the board of Citizens. There is no accounting for$6.2 billion, and we’re talking 10 percent of the budget of the state of Florida.”
He has indicated that he will push for an audit of the billion-dollar program in the next legislative session.
Advocates for the insurance program claim it has helped keep costs low for average Florida residents.
“I support anything that prevents corruption, but I am opposed to anything that will leave people with insurance costs that are reasonable,” said Robert Hunter, insurance director at the Consumer Federation of America and a former Texas Insurance Commissioner.
He told Florida Watchdog that the real problem is the private insurers trying to take down Citizens in order to remove competition.
“Citizens has done a good job providing low-cost insurance to many people and (private insurers) don’t like it because they could charge much more without Citizens on the market,” Hunter told Florida Watchdog.
In 2009, Florida Chief Financial Officer Jeff Atwater, then president of the Florida Senate, joined and the Finance Officer Alex Sink to support increasing the rates of the property insurer in order to push more people off the program.
Often-criticized Citizens president Barry Gilway said he supports the new position proposed by the Legislature.
“We hope that this additional layer of accountability will help restore public trust and commitment of Citizens to the highest standards of financial accountability and corporate integrity,” he wrote in a statement.
His agency did not return calls to Florida Watchdog
The proposal of a new inspector general follows an investigation by the Office of Insurance Regulation of Florida which revealed millions of dollars in excessive travel bills and conferences expenses that ultimately wound up at the feet of the state taxpayers.
This includes over $1.3 million spent on plane tickets during January and August of 2012.
Florida’s insurance regulators recommend contracting out more work and reducing travel for Citizens employees.
Citizens denied these claims in an email sent to Florida Watchdog.
“Citizens Iinsurance is not ideal for the homeowners of Florida and we’d like to move those policies to the private market,” said Andres Malave, spokesman for the nonprofit organization Americans for Prosperity Florida. “But until then, we support any move to improve responsibility and accountability.”
Citizens was originally created in response to the mounting costs of property insurance costs in the face of hurricane damages, specifically as an “insurer of last resort.”
It has since become the largest property insurer for the residents of Florida.
Contact Marianela Toledo at Marianela.Toledo@FloridaWatchdog.org.