Citizens Property Insurance scandalized in the realm of homeowners insurance
Florida’s Citizens Property Insurance has been the target of scandals over the past several months. The state-run organization, through which the majority of Florida residents receive their homeowners insurance coverage, has been wrangling with financial problems for years and has recently begun shedding policies, which are being taken up by private insurance companies. Amidst a flurry of criticism, Citizens Property Insurance President Barry Gilway appeared before Florida lawmakers this week to defend the state-run insurer.
State-run insurer continues to struggle with myriad problems
Last year, Florida lawmakers ordered Citizens Property Insurance to take dramatic steps in order to solve some of the problems it has been facing. One of the measures the insurer had taken was to depopulate itself of homeowners insurance policies. Throughout 2012, the insurer let go of many policies throughout the state. Private insurers, which have traditional been wary of offering homeowners insurance coverage in some parts of Florida, eagerly took up these policies, ensuring that homeowners retained their protections. This measure has drawn the ire of consumers, but was relatively well received by lawmakers, until certain management troubles and allegations of lavish spending began to gain attention.
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Accusations of misconduct linger
Citizens Property Insurance has been accused of corporate misconduct several times over the past year. The insurer was investigated two times in three months in 2012 in order to uncover the scandalous activity that was occurring within the organization. Some of this misconduct included lavish spending by executives. The insurer has been routinely raising rates on homeowners insurance coverage and much of the funds collected through higher premiums have gone directly to executives, which was typically spent at high-end restaurants and hotels.
Gilway praises Citizens Property Insurance
Gilway appeared before Florida lawmakers this week to defend the actions of Citizens Property Insurance. The presidents focused his praise on the organization’s success in shedding homeowners insurance policies in recent months. Gilway also suggested that the organizations expenditures are significantly lower than private insurance companies and other state-run insurance groups. The praise that Gilway has levied to Citizens Property Insurance has done little to placate the concerns of Governor Rick Scott, however, who has begun publicly decrying the organization.