WINDSTORM PROTECTION

Citizens Insurance: Moving in the right direction

 

www.citizensfla.com

When I took the reins at Citizens, I knew I was taking on a challenge. I’d been brought in, not to babysit, but to fix an organization facing serious internal and external challenges. I have made a career of doing this successfully time after time.

I cannot change what happened before my tenure at Citizens began. What I can do is make changes to dramatically improve this organization going forward. My goal is to make Citizens an industry and state model.

I therefore have devoted myself from day one to making changes to improve the organization’s efficiency, ethics and fiscal health.

One of the most pressing areas of concern was deficiencies in Citizens’ complaints, disciplinary and internal auditing procedures and capabilities. These weaknesses included insufficient policies, under-qualified staff and reporting and investigative procedures that did not align with industry best standards.

To address these issues, I immediately took the following steps:

• Made significant senior management changes in areas with the biggest problems, including appointing and empowering a new ethics officer. I eliminated the top executive overseeing the areas in which there had been problems, reassigning those responsibilities to four senior executives prepared to make across the board improvements.

• Recruited a top-notch head of human resources who reports directly to me. My first direction to him was to develop a strong and uniform set of disciplinary and severance policies, which will be presented to the Citizens Board of Directors in March.

• Worked with our chief of internal audit to restructure Citizens’ Office of Internal Audit (OIA) in accordance with corporate best practices. This newly empowered office now reports directly to Citizens’ Board, eliminating potential conflicts between management and internal investigations.

• Strengthened the OIA’s ability to identify fraud and misconduct by hiring three forensic auditors with extensive experience and proven dedication to the task of rooting out fraud. They include a forensic investigations manager from one of the nation’s top 40 certified public accounting firms; a highly decorated, former FBI special agent in charge of white collar investigations; and a former investigations and financial/operations audit manager for Florida-based EverBank

Like the governor and many others, I find the misdeeds and allegations of misconduct by Citizens employees both embarrassing and troubling. I therefore ordered a comprehensive review of all complaints and investigations handled by my predecessors and ordered that it be released publically. This was imperative to ensure transparency and make it clear that every Citizens employee will be held to the highest standards.

Let me be clear: Misbehaviors of the past will not be tolerated under my watch. I have ordered vital changes to ensure that all allegations are investigated and properly dealt with in a timely manner. These changes are already leading to greater responsiveness and a more positive and appropriate work environment.

Citizens has taken great efforts to tighten its belt financially as well. I immediately implemented tightened expense standards and required that I personally preapprove all out-of-state and international travel and costs. In March, Citizens will announce even stricter standards to better align ourselves with state expense and procurement guidelines.

We also have looked to outside experts for guidance. We have launched a top to bottom organizational review by KPMG to gain a better understanding of how we operate and determine what additional improvements are needed. My goal is to ensure that we operate at peak efficiency and are spending money wisely.

It is vital that we not lose focus of the many important strides Citizens has made to decrease exposure and protect our policyholders and all Florida taxpayers from the threat of assessments. Citizens recently concluded one of its most successful years of depopulation, returning nearly 300,000 policies to the private market and plans to improve on that success in 2013. Successes like these, coupled with ground-breaking private risk-transfer programs have led to a $2.7 billion reduction in potential assessments on all Florida policyholders for the 2013 storm season.

It is successes like these, made possible by the dedicated public servants who work on behalf of Citizens’ 1.3 million policyholders every day, that will help move Citizens in the right direction. I cannot undo the past, but I can and will make Citizens a model company for all Floridians.

Barry Gilway is president of Citizens Property Insurance Corporation.

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