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Florida AG Report No. 2006-0961 Citizens Property Insurance Corporation Operational Audit January 1, 2004, Through October 20, 2005, And Selected Actions.

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Presentation on theme: "Florida AG Report No. 2006-0961 Citizens Property Insurance Corporation Operational Audit January 1, 2004, Through October 20, 2005, And Selected Actions."— Presentation transcript:

1 Florida AG Report No Citizens Property Insurance Corporation Operational Audit January 1, 2004, Through October 20, 2005, And Selected Actions Taken Through December 7, 2005

2 Florida AG Report No Audit Scope Infrastructure. Infrastructure. Policy eligibility determinations and depopulation. Policy eligibility determinations and depopulation. Accessibility of policyholder information. Accessibility of policyholder information. Customer service. Customer service. Claims handling. Claims handling. Premiums. Premiums. Financing options. Financing options.

3 Florida AG Report No Audit Methodology Research. Research. Internet sources. Internet sources. State statute. State statute. Media. Media. NAIC. NAIC. Interviews. Interviews. State regulators. State regulators. Citizens staff. Citizens staff. Other last resort insurers. Other last resort insurers. Agents. Agents. Industry experts. Industry experts. State bond experts. State bond experts. Surveys. Surveys. Agents. Policyholders. Analytics. Analytics. Complaint files. Claims data. Policyholder data. Financing options. Internal control evaluation. Internal control evaluation. Transaction and file tests. Transaction and file tests. Specialist contract. Specialist contract.

4 Florida AG Report No Infrastructure Evaluation of controls. Evaluation of controls. Verification of credentials. Verification of credentials. Background investigations. Background investigations. Standards of conduct. Standards of conduct. Procurement policies and procedures. Procurement policies and procedures. Travel policy. Travel policy.

5 Florida AG Report No Policy Eligibility Determinations and Depopulation Eligibility determinations. Eligibility determinations. Statutory amendments. Statutory amendments. Monitoring of agents. Monitoring of agents. Market Assistance Plan. Market Assistance Plan. Take-out bonuses. Take-out bonuses. Long-term monitoring. Long-term monitoring.

6 Florida AG Report No Policyholder Information Table4 Agents Electronic Access to Policyholder Information As of October 2005 ePAS System eWind System CSC System Catastrophe Claims Tracking System Personal Lines Accounts High-Risk Accounts Commercial Accounts All Accounts Rating and Quotes Yes No Applications and Renewals Yes No Policy Status Yes No NonCat Claims Filing & Status Yes No Catastrophe Claims Filing & Status No

7 Florida AG Report No Customer Service Customers were dissatisfied with claims handling. Customers were dissatisfied with claims handling. Consolidated complaint unit is to be established. Consolidated complaint unit is to be established. Table 5 Customer Service Survey Customer Service Area Somewhat Dissatisfied to Dissatisfied (Number) Somewhat Dissatisfied to Dissatisfied (Percentage) Satisfied to Very Satisfied (Number) Satisfied to Very Satisfied (Percentage)Total Responses (1) Policy Issuance1017%5083%60 Policy Renewal712%5188%58 Agent Service916%4984%58 Call Center Operations717%3383%40 Claims Handling1432%3068%44 Note: (1) Not all 62 respondents responded to all questions.

8 Florida AG Report No Claims Handling Monitoring of claims processing. Monitoring of claims processing. Claims tracking system. Claims tracking system. Monitoring of contracted adjusters. Monitoring of contracted adjusters. Reinspections. Reinspections. Adjust-your-own firms. Adjust-your-own firms.

9 Florida AG Report No Claims Handling (Continued) Undated file documents. Undated file documents. Untimely processing of claims. Untimely processing of claims. Fees. Fees. Insurance-to-value analyses. Insurance-to-value analyses. Case reserves. Case reserves.

10 Florida AG Report No Premiums Rates were set based on average rates of top 20 and top 5 insurers, as applicable. Rates were set based on average rates of top 20 and top 5 insurers, as applicable. Actuarial studies were not available to demonstrate actuarial soundness of rates. Actuarial studies were not available to demonstrate actuarial soundness of rates.

11 Florida AG Report No Financing Options Potential enhancements: Potential enhancements: 1999A bonds - Eliminate negative cost-of-carry. Assess actuarially sound premiums, reduce catastrophe loss adjustment expenses, and competitively select service providers.

12 Florida AG Report No Audit Results Legislative committee presentations. Legislative committee presentations. Briefing of legislative leaderships staff. Briefing of legislative leaderships staff. Timely corrective actions by management. Timely corrective actions by management. Statutory changes. Statutory changes.

13 Florida AG Report No Audit Team William O. Monroe, CPA Auditor General Hillman Brannon Hillman Brannon Buxbaum, Loggia & Associates Buxbaum, Loggia & Associates Scott Copeland Scott Copeland Cindy Fernald Cindy Fernald Aaron Franz Aaron Franz Carl Gabrini Carl Gabrini Don Hancock Don Hancock Chuck Janes Chuck Janes Christine Knight Christine Knight Rich Moreira Rich Moreira Richard Munson Richard Munson Sandra Myers Sandra Myers Angela Phillips Angela Phillips Shelly Posey Shelly Posey Don Reeder Don Reeder Eric Seldomridge Eric Seldomridge Chris Stanisci Chris Stanisci Lisa Strickland Lisa Strickland Yueh-Lin Sullivan Yueh-Lin Sullivan Peter Tan Peter Tan Matt Tracy Matt Tracy L.R. Weathermon L.R. Weathermon Allen Weiner, Audit Team Leader Allen Weiner, Audit Team Leader Linda Woodward Linda Woodward Gail Wright Gail Wright

14 Florida AG Report No Contact Information Don Hancock, CPA Deputy Auditor General State Government Audits Florida Auditor General Web Site:


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