State report chides Citizens on procurement, travel [The Palm Beach Post, Fla.]

By Charles Elmore, The Palm Beach Post, Fla.
McClatchy-Tribune Information Services

Feb. 01--A state report released Friday says Citizens Property Insurance Corp. needs to work on its negotiating skills with vendors and get a better handle on travel expenses.

The "market conduct examination" by the state's Office of Insurance Regulation found that "while Citizens appears to follow its procurement procedure policies, it does not appear to place any emphasis on price negotiation, instead relying on best and final offer."

Spending on vendor contracts accounts for about 20 cents of every premium dollar collected by the state-run insurer with 1.3 million customers, by the report's figuring.

"In some instances there was a large price differential between the chosen vendor's contract price and a lower bidder's price," the report said. As of June, the report found 499 out of 903 contracts were not competitively bid for various reasons.

Citizens spokeswoman Christine Ashburn said Friday the company is following "established guidelines" for such contracts and seeking a best and final offer that "mirrors the process typically utilized by state agencies."

The state report concludes "a more detailed review" of procurement is warranted and an additional report is scheduled.

On claim handling and complaints, the report found what it called minor procedural or operational errors but overall "Citizens operates in a timely manner, responding to consumers within one or two days with few errors."

But other areas drew more attention: "Our review of the procurement and of travel expense reimbursement processes, however, indicates that, while Citizens follows its written procedures, existing procedures may be deficient. "

Among the report's recommendations on travel: Citizens should "increase supervision over spending and revise the reimbursement policies to adhere to more specific guidelines." It also urged more video conferencing in place of face-to-face meetings.

The company's response in the report says, "A more stringent travel policy that applies to all Citizens' employees and senior management was implemented in October 2012. During the first quarter of 2013, the Company is recommending to the Board of Governors adoption of the state travel standards and reporting requirements."


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