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Gov. Scott to insurer Citizens: Explain rebuff on foreign travel ban

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

Aug. 01--Gov. Rick Scott's office on Thursday called the CEO of state-run insurer Citizens to an Aug. 19 Cabinet meeting to explain why the company rejected the governor's recommended ban on foreign travel by board members, brought to light by reporting in The Palm Beach Post.

"Governor Scott previously called on Citizens board members to change their travel policy so it prohibited international travel and permitted only essential employees to attend board meetings," wrote Karl Rasmussen, director of cabinet affairs in the governor's office, in a letter to Citizens CEO Barry Gilway.

"Recent media stories report that not only have these requests been rebuffed, but Citizens board members have continued international travel, sometimes at excessive costs to state taxpayers," the letter said.

Gilway said in a statement: "I received the governor's request today and am really looking forward to updating the cabinet on this issue."

The Post reported Sunday that Citizens board chairman Chris Gardner exceeded company travel limits on his second trip to Bermuda this year, repaying the difference after The Post asked for the records. One customer called the travel "outrageous" as Citizens policyholders struggle with company decisions that are costing them money or taking away coverage completely.

On Wednesday, the newspaper reported travel by a board member defied a 2013 recommendation from Scott after his inspector general found "insufficient controls" on travel spending at Florida's biggest property insurer. "Citizens board members must immediately change their travel policy to prohibit any international travel," Scott said last year.

Gilway responded that Scott's recommendations are always carefully considered, but in this case he urged Gardner to become closely involved in 2014 negotiations on reinsurance, or back-up coverage that could reduce assessments on policyholders after storms.

Citizens initially approved a $425-per-night bill at the Fairmont Southampton resort in Bermuda for Gardner for a two-day stay in April, records show. The cost overshot a $373 limit for Bermuda hotels that Citizens imposed on itself as part of tougher rules that amounted to "a concrete way Citizens can demonstrate to our policyholders and the people of Florida our commitment," Gilway said at the time.

The governor appoints three of nine Citizens board members and oversees its management along with other Cabinet officials.

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At least five company officials have traveled overseas this year to such places as Zurich, Switzerland, and London, records show, including Gardner, Gilway, Chief Financial Officer Jennifer Montero, Chief Risk Officer John Rollins and general counsel Dan Sumner. Gardner, the lone board member in the group, went to Bermuda twice.

The state-run insurer employed "insufficient controls" over travel spending that cost policyholders $1.3 million in eight months, Scott's Chief Inspector General Melinda Miguel found last year. The company's then-chief financial officer upgraded her $459 per night deluxe room to gold status at the Fairmont Hamilton Princess Hotel in Bermuda, ringing up a bill of $633 per night, the report found.

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(c)2014 The Palm Beach Post (West Palm Beach, Fla.)

Visit The Palm Beach Post (West Palm Beach, Fla.) at www.palmbeachpost.com

Distributed by MCT Information Services

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