Senator Mike Fasano (R-New Port Richey) has heaped praise on Citizens for putting added resources and energy behind reforming its claim-handling process. “If you asked me two years ago what I thought of Citizens, I would have a quite different answer,” he said. “But in the past eight to 10 months, Citizens has done an outstanding job and I am pleased with the progress they are making toward resolving claims. It is beginning to act like Florida's largest insurance carrier and the fourth largest in the country.”

Fasano is part of the Task Force on Citizens Property Claims Handling and Resolution, which lawmakers established as part of the property bill enacted earlier this year. The task force is composed of four full members, with one appointment each by Governor Charlie Crist, Chief Financial Officer Alex Sink, Senate President Ken Pruitt (R-Port St. Lucie), and House Speaker Marco Rubio (R-Miami).

The task force members include: Michael B. Twomey, Sr., a Tallahassee attorney; Mike Lancashire, vice president of claims at The Main Street America Group in Jacksonville; Rep. Julio Robaina, (R-Miami); Heather Carruthers of Fair Insurance Rates in Monroe County in Key West; and Tim Loftin, senior vice president of claims at Citizens. In addition, there are three ex-officio voting members including Insurance Commissioner Kevin McCarty, Consumer Advocate Bob Milligan, and Citizens Executive Director Scott Wallace. The task force is charged with delivering an interim report to Governor Crist this month and a final report by July 2008.

“We're happy for any help we can get,” said Citizens spokesman Rocky Scott, perfectly reflecting the company's accepting attitude toward the state scrutiny. Citizens now covers 1.3 million Floridians, making it by far the largest insurer in the state. “We're not the Citizens we were in 2004,” he said referring to new leadership and new strategies to win over doubters.

By the Numbers

At the task force's first meeting, Citizens' officials showed just how many challenges it faced in the wake of the 2004 and 2005 hurricane seasons. In 2004, the insurer had over 120,000 claims from hurricanes Charley, Frances, Ivan, and Jeanne, which was far from anticipated. The numbers tell the story, in the 75-days after the hurricanes moved through the state, Citizens only closed an average of 37 percent of all claims. Ninety days after the storms, the average only improved to 48 percent. That is the main reason that regulators were inundated by over 10,000 customer complaints. By 2005, Citizens did show improvement. After receiving over 180,000 claims from hurricanes Dennis, Katrina, Rita, and Wilma, by the 75-day mark Citizens had closed an average of 76 percent of its claims, a number that jumped to 85 percent as of day 90.

All told, Citizens received 303,459 claims in 2004 and 2005 while paying out over $5.1 billion in claims. The latest statistics show that Citizens has closed most of those claims, reporting that 98.8 percent of all claims have been settled. As of May, the insurer had 3,510 outstanding claims from the 2004 and 2005 storms, 2,723 of which are being disputed for a total dollar amount of $120 million. They included 986 cases in court, a number of which encompass many Panhandle residents suing for full payment on homes destroyed by wind and flood during Hurricane Ivan. Another 1,100 claims have been filed for the first time in 2007.

That fact that the remaining claims are only remaining open for legal and other reasons, not related to customer service, was not lost on Consumer Advocate Bob Milligan. ”I can't say they have failed to close claims as much as they have gotten a lot of new ones and have had a lot reopened,” he said.

Some task force members turned their attention to the open claims. One lesson not lost on Citizens is that perhaps some time limit should be placed on homeowners to challenge disputed claims. Officials said that some lawyers and freelance adjusters have tried to persuade homeowners to challenge claims in order to collect large fees. The 2004 hurricane season turned Florida into a magnet for public adjusters, private contractors who settle claims on behalf of the homeowner instead of working for an insurance company. The number of registered public adjusters in the state rose from 400 to more than 2,500, said Raymond Altieri, past president of the Florida Association of Public Adjusters.

”We have created a spawning ground for this stuff to go on,” said Rep. Julio Robaina (R-Miami), who told stories of public adjusters offering wide-screen televisions to homeowners who hire them to challenge their insurers. In return, those adjusters collect fees of up to 40 percent of the insurance claim check. Citizens testified that the average cost to settle a claim is $10,000.

Improvements Remain

Despite the upbeat tone about Citizens there remain some problems that task force members would like to see corrected. Cliff Long, Pensacola outreach coordinator for the Division of Consumer Services in the Department of Financial Services, testified that there are lingering communication issues. The include trouble reaching a live person by phone and getting a Citizens staffer knowledgeable with their specific claim.

To its credit, Citizens officials said they now require all employees to take customer service training and they've hired an internal consumer advocate. In time for the 2007 hurricane season, Citizens has enhanced its web site–www.citizensfla.com to include a contact list for all departments and a forum for consumer feedback.

State officials say they like what they see so far from Citizens, though the real test will come from the next big storm. “It is essential that we operate Citizens like a business and improve customer service for Citizens policyholders,” said Alex Sink, the state's Chief Financial Officer.

From the industry's perspective, Citizens' improvements have been welcomed. “Citizens has made enormous strides in claim handling,” said Florida Insurance Council spokesman Sam Miller. “They handled 2005 better than 2004 and the tornadoes in 2006 were handled even better.”

Miller credited Citizens new leadership for seeking public input by holding their own hearings around the state to hear from policyholders. The company has added more employees and technology to improve its work and tapped some of the expertise from private insurance industry, by hiring top managers from Nationwide and other insurers. “They are hiring competent and experienced mangers familiar with the industry,” Miller said.