Many workers who buy voluntary life insurance value it enough to continue paying for it. That perceived value should make a solid foundation upon which to build.
Dec. 02--Tuesday's meeting of the Citizens Property Insurance Corp. board featured so many hilariously ironic moments that it's hard to pick just one. But let's try.
Tom Lynch, who owns a Delray Beach-based insurance agency, raised questions about the state-run insurer of last resort's mission statement. It says that Citizens will seek to provide "superior" customer service. Mr. Lynch believes that to be an unrealistically high goal.
Service "shouldn't be bad," Mr. Lynch said, "but it doesn't have to be 'superior.' "
In fact, Citizens would have to improve an awful lot just to reach "bad." Insurance agents will tell you that Citizens is a pain to deal with. Citizens policyholders will tell you the same thing, often in R-rated terms.
Mr. Lynch's disconnect exemplified the meeting. For months, The Palm Beach Post and other newspapers have reported on serious problems at Citizens, which insures more Floridians than any other company. Problems related to employee misconduct were on the agenda for Tuesday's meeting of the eight board members, President Barry Gilway and other Citizens executives.
Whom did they blame? The newspapers.
Chairman Carlos Lacasa led off with a screed against a Post editorial that was an accurate, multi-count indictment of Citizens over the past few months. Mr. Lacasa called the editorial "shameful," and said it had been written to "incite the public." Here's a flash: The public doesn't need inciting about Citizens.
After he vented, Mr. Lacasa acknowledged that, "No question, some of these things happened." In fact, most of "these things" happened. "These things" included a 2009 incident in Tampa when two Citizens employees went to a club called Coyote Ugly. One got on the bar, took off her bra and whirled it above her head. She worked for the human resources department. The other bared her breasts. She was the assistant human resources director. Their punishment? Counseling.
Citizens' Office of Corporate Integrity had been investigating that and other embarrassments. So what did Mr. Gilway, who was hired in June, do? He eliminated the Office of Corporate Integrity. On Tuesday, Mr. Gilway acknowledged that his decision was "dumb," though he criticized himself more on style than substance.
For all the discussion of bad employees, Tuesday's meeting didn't get to the biggest issue: Citizens' campaign to jack up premiums by ordering new inspections of homes and denying discounts that policyholders had earned by strengthening their property. The Post'sCharles Elmore revealed this campaign last December, and the paper has been full of anecdotes since then.
Since Gov. Rick Scott took office in January 2011, Citizens has been under increasing pressure to shed some of its 1.5 million policies and raise money. After a catastrophic storm or a really bad storm season, all policyholders in Florida -- not just those whom Citizens insures -- could be assessed to pay Citizens claims. To the free-market ideologues in Tallahassee, this amounts to unfair subsidization. Citizens must shrink dramatically, so the insurance market can work.
Here's another perspective: Private insurers have dumped all their hurricane-risky policies. Almost all of those have gone to Citizens. The free market can't work. Florida will have to live with a Citizens that might be smaller but still might be the biggest in the state. Since more than half of Citizens policies are in five large counties, Palm Beach being one, the trade-off is that providing less-than-exorbitantly priced insurance keeps the real estate market humming in the counties that power the state's economy.
So Florida needs a Citizens that is run differently than a private company. Elected officials -- the governor, chief financial officer, Senate president and House speaker -- appoint the board members to make sure Citizens must be transparent and accountable.
Yet as it complains about needing cash, Citizens wants to spend $350 million of its $6 billion surplus on an incentive plan for private companies to take as many as 300,000 policies. The money is supposed to be in the form of loans, no more than $50 million per company, but the loans might never get repaid. Also, the companies must limit premium increases for just three years. If all those 300,000 customers wind up back in Citizens, the $350 million will have been wasted.
Not to worry, Mr. Gilway says. Citizens will have the plan reviewed -- by Goldman Sachs, which Citizens just used to underwrite a bond sale. Gee, I wonder if Goldman Sachs will like the plan.
Of course, to point out such an obvious conflict of interest might be to "incite the public." And it would be "shameful" to suggest that Citizens is trying to make policyholders so miserable that they will take whatever offer comes from a private company. But last week, Mr. Gilway bragged that Citizens offers an "inferior" product. At Citizens, "bad" is the new normal.
(c)2012 The Palm Beach Post (West Palm Beach, Fla.)
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