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Citizens Property Insurance Corporation Operational Audit January 1, 2004, Through October 20, 2005, And Selected Action PowerPoint Presentation
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Citizens Property Insurance Corporation Operational Audit January 1, 2004, Through October 20, 2005, And Selected Actions Taken Through December 7, 2005 Audit Scope Infrastructure. Policy eligibility determinations and depopulation. Accessibility of policyholder information.

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Presentation Transcript
slide1
Citizens Property Insurance Corporation

Operational Audit

January 1, 2004, Through October 20, 2005,

And Selected Actions Taken Through

December 7, 2005

Florida AG Report No. 2006-096

audit scope
Audit Scope
  • Infrastructure.
  • Policy eligibility determinations and depopulation.
  • Accessibility of policyholder information.
  • Customer service.
  • Claims handling.
  • Premiums.
  • Financing options.

Florida AG Report No. 2006-096

audit methodology
Research.

Internet sources.

State statute.

Media.

NAIC.

Interviews.

State regulators.

Citizens’ staff.

Other “last resort” insurers.

Agents.

Industry experts.

State bond experts.

Surveys.

Agents.

Policyholders.

Analytics.

Complaint files.

Claims data.

Policyholder data.

Financing options.

Internal control evaluation.

Transaction and file tests.

Specialist contract.

Audit Methodology

Florida AG Report No. 2006-096

infrastructure
Infrastructure
  • Evaluation of controls.
  • Verification of credentials.
  • Background investigations.
  • Standards of conduct.
  • Procurement policies and procedures.
  • Travel policy.

Florida AG Report No. 2006-096

policy eligibility determinations and depopulation
Policy Eligibility Determinations and Depopulation
  • Eligibility determinations.
    • Statutory amendments.
    • Monitoring of agents.
  • Market Assistance Plan.
  • Take-out bonuses.
  • Long-term monitoring.

Florida AG Report No. 2006-096

policyholder information

Table

4

Agents

Electronic Access to Policyholder Information

As of October 2005

Catastrophe

Claims

ePAS

eWind

Trackin

g

System

System

CSC System

System

Personal

Lines

High

-

Risk

Commercial

Accounts

Accounts

Accounts

All Accounts

Rating and Quotes

Yes

Yes

No

Applications and Renewals

Yes

No

No

Policy Status

Yes

Yes

No

NonCat Claims Filing & Status

Yes

No

Catastrophe Claims Filing &

Status

No

Policyholder Information

Florida AG Report No. 2006-096

customer service
Customer Service
  • Customers were dissatisfied with claims handling.
  • Consolidated complaint unit is to be established.

Florida AG Report No. 2006-096

claims handling
Claims Handling
  • Monitoring of claims processing.
    • Claims tracking system.
    • Monitoring of contracted adjusters.
    • Reinspections.
    • Adjust-your-own firms.

Florida AG Report No. 2006-096

claims handling continued
Claims Handling(Continued)
  • Undated file documents.
  • Untimely processing of claims.
  • Fees.
  • Insurance-to-value analyses.
  • Case reserves.

Florida AG Report No. 2006-096

premiums
Premiums
  • 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.

Florida AG Report No. 2006-096

financing options
Financing Options
  • Potential enhancements:
    • 1999A bonds - Eliminate negative cost-of-carry.
    • Assess actuarially sound premiums, reduce catastrophe loss adjustment expenses, and competitively select service providers.

Florida AG Report No. 2006-096

audit results
Audit Results
  • Legislative committee presentations.
  • Briefing of legislative leadership’s staff.
  • Timely corrective actions by management.
  • Statutory changes.

Florida AG Report No. 2006-096

audit team william o monroe cpa auditor general
Hillman Brannon

Buxbaum, Loggia & Associates

Scott Copeland

Cindy Fernald

Aaron Franz

Carl Gabrini

Don Hancock

Chuck Janes

Christine Knight

Rich Moreira

Richard Munson

Sandra Myers

Angela Phillips

Shelly Posey

Don Reeder

Eric Seldomridge

Chris Stanisci

Lisa Strickland

Yueh-Lin Sullivan

Peter Tan

Matt Tracy

L.R. Weathermon

Allen Weiner, Audit Team Leader

Linda Woodward

Gail Wright

Audit TeamWilliam O. Monroe, CPAAuditor General

Florida AG Report No. 2006-096

contact information
Contact Information

Don Hancock, CPA

Deputy Auditor General

State Government Audits

487-9037

donhancock@aud.state.fl.us

Florida Auditor General Web Site:

http://www.state.fl.us/audgen

Florida AG Report No. 2006-096