Citizens Insurance Board Responds To Scandal, Blasts Media Reports

November 28, 2012

Responding to charges of improprieties at Citizens Property Insurance Corp. the state-backed insurer’s CEO lashed back Tuesday, calling media coverage of the unfolding drama inaccurate and misleading.

Speaking to members of the company’s governing board, Citizens President and CEO Barry Gilway acknowledged that a handful of Citizens supervisors in separate incidents behaved inappropriately but others face allegations that have been disproved or remained unsubstantiated, he said.

“The last time I looked around, we were still in the United States of America,” Gilway said. “We have not been annexed to a communist regime. We still have some basic rights. Those rights include innocent until proven guilty.”

Gilway requested the meeting last week following the release of hundreds of pages of documents alleging misappropriations of funds, sexual harassment, lucrative severance packages and other inappropriate behavior by a handful of Citizens supervisors between 2004 and 2010.

In one instance a pair of Citizens supervisors took off their bras and danced at the Coyote Ugly bar in Tampa during a company retreat there in 2009. The employees in question were disciplined, according to do documents released by Citizens last week.

Another supervisor was accused of practicing law in Florida without a license, an allegation Gilway says remains unsubstantiated.

Gilway said he was “disgusted” by the actions of some employees, which happened long before he took over in June. But he blasted media accounts he said took unsubstantiated information on a few to sully the integrity of the entire company.

“It is also critically important that the actions of a very, very few people over the course of four years not tarnish the reputation of 1,300 employees who come in every single day and bust their tails, even though they are getting trashed in the press on a daily basis, ” Gilway said.

The company has also been under scrutiny because an internal auditing office was disbanded as the allegations were being examined.

The allegations prompted Gov. Rick Scott last week to direct his inspector general to investigate whether Citizens Office of Corporate Integrity employees were fired for conducting looking into several allegations. Meanwhile, the inspector general’s office is also looking at Citizens’ business expenses following allegations of stays in upscale hotels.

Sean Shaw, a former Florida insurance consumer advocate who now works for a Tampa-based law firm that represents insurance consumers, said Citizens’ anger was misdirected. Instead of focusing on the media, Citizens’ energy would be better spent shoring up an internal governance structure, he said.

“Instead of spending time talking about fixing abuses of the public trust, the board seems more interested in blaming the media for finding out about it,” Shaw said in a statement. “Citizens says the media is disgusting, but I assure you, policyholders and taxpayers have even more choice words about the management of Citizens.”

Gilway acknowledged that a number of procedural safeguards were not in place between 2004 and earlier this year. The company, for example, had no written policy toward severance agreements while records show that more than $750,000 was spent on severance packages since 2004. Steps are now being taken to address those corporate governance issues. Travel guidelines have already been put in place.

“We will win back the credibility of this company in the eyes on the public,” Citizens Chairman Carlos Lacasa said Tuesday.

By Michael Peltier, The News Service of Florida


5 Responses to “Citizens Insurance Board Responds To Scandal, Blasts Media Reports”

  1. David Huie Green on November 29th, 2012 12:55 pm

    “The last time I looked around, we were still in the United States of America,” Gilway said. “We have not been annexed to a communist regime. We still have some basic rights. Those rights include innocent until proven guilty.”

    The problem with that statement is not that it is false but that it assumes no accusations should be allowed. Part of the function of the press is to point out wrongdoing. To say, “I was accused of A, B, C, D, E, F, G but I can prove I didn’t do C,” doesn’t really exonerate you.

    And it isn’t just the Communists. The most recent case of someone throwing out the judicial process is in Egypt where the new guy decided to place himself above the law.

    David for government responsible to the people

  2. jay anthony on November 28th, 2012 1:37 pm

    EyesOpen you do not pay one quarter of your bill for Citizens assessments. You in fact pay 1.4% of your total premium, a 10 year assessment placed after the 2005 storm season. The other assessment you pay are for the Florida Cat Fund, which is a majority private company obligations, and for FIGA, which is the fund that pays claims when private carriers fail. In fact, in the event of another huge storm, Citizens policyholders will subsidize you more than you would them. This fiction that people are providing subsidies to coastal people is a creation of the insurance lobby which wants rates for everyone to go up a minimum of 60%. Also, if we applied yours and c.w’s argument to taxes, you’d be screwed. Coastal and South Florida heavily subsidize your schools, roads, etc.

  3. EyesOpen on November 28th, 2012 8:07 am

    “Communist regime”

    Oh! You mean like forcing mortgage holders with private insurance to fund your company whether they like it (or can afford it) or not? One quarter of my bill was fees assessed for Citizens. I could make an extra house payment a year with that money, but instead I am forced to pay it for homes that should have never been built to begin with.

  4. c.w. on November 28th, 2012 5:09 am

    Citizens Ins. never should have been. Barry Gilway says, we are in the US. Well the people that chose NOT to live on beach front and other places that are unsafe are FORCED to pay for someone elses insurance and give folks like him a JOB. Disband Citizens Ins. today!!

  5. Jane on November 28th, 2012 3:10 am

    Private insurance companies have you under their thumb because you have to have insurance on a mortgaged home or a business. They overcharge, they don’t pay up when something happens and they make the contracts so difficult to understand that you almost have to be a lawyer to read the stuff. And then someone wonders why we hate insurance companies? If Citizens wasn’t doing something wrong they wouldn’t be investigated, and if these other insurance companies were looked into they are probably even worse! So Citizens CEO doesn’t like the media? It seems the media is the only one looking out for the people, because our government is too busy regulating everything and campaigning.

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