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Citizens Insurance CEO Scott Wallace resigns

Scott Wallace, the President/CEO and Executive Director of Florida's state-run insurance organization, Citizens, announced his resignation on Friday, the organization announced Monday. 

Citizens, which was included in widespread insurance reform last year, has grown rapidly in recent years, causing many to question its financial security.

Wallace has been challenged by some lawmakers over some of Citizens' policies, including several changes that took place Jan. 1, 2012.

Sen. Mike Fasano, New Port Richey, sent a charged letter to Wallace today through the Senate Banking and Insurance Committee, asking several questions about Citizens' policies. 

"I have received many complaints from policyholders that Citizens is conducting business in ways that, in some cases, are inconsistent from one homeowner to another," he wrote. His letter criticized Citizens for spending large amounts on outside legal counsel to fight sinkhole claims, applying different rules to different customers and canceling policies on struggling homeowners.

Wallace, who has been the top executive at Citizens for six years, plans to stay at the helm of the insurer until April, to help with the transition. His resignation was voluntary and his contract requires him to give 90 days notice before leaving the company. He could not be reached for comment Monday.

"Scott has led the company through a complex ramp up of the infrastructure needed for Citizens to provide the services and possess the claims payment ability that is so essential to our state's housing industry," Citizens' chairman Carlos A. Lacasa said in a statement.

Wallace did not provide a reason for resigning in his letter, available here (Download Wallace_ResignationLe).

Christine Ashburn, a spokesperson for Citizens, said Wallace's resignation had nothing to do with mounting criticiscm from lawmakers, or recent changes to Citizens' policies.

"I don’t think there’s any backstory here," she said. "It has to do with the realigning of priorities and trying to get some balance in his personal life."

Here's the release from Citizens:

TALLAHASSEE, FL - Citizens Property Insurance Corporation today announced the resignation of President/CEO and Executive Director Scott R. Wallace. Wallace plans to remain at Citizens through April 6, 2012 to ensure a smooth transition.

Wallace, who has been at the helm of Citizens for the past six years, tendered his voluntary resignation Friday, January 6, 2012 in a letter to Chairman Carlos A. Lacasa.

Speaking on behalf of the board, Chairman Lacasa accepted Wallace's resignation with regret, praising his dedication and achievements. Â Lacasa stated, "Scott has led the company through a complex ramp up of the infrastructure needed for Citizens to provide the services and possess the claims payment ability that is so essential to our state's housing industry."

"His talents will be sorely missed," Lacasa said.

Chairman Lacasa credited Wallace for continuous improvements in Citizens' service levels, risk transference initiatives, and professionalism towards our policyholders, agents, legislative leaders and stakeholders.  Citizens' surplus has grown to over $5.5 billion and our total claims paying capacity (including surplus, pre-event financing, Florida Hurricane Cat Fund and private reinsurance) is nearly $17 billion.

"The Board is grateful to Scott Wallace for a job well done," Mr. Lacasa said.

 

Comments

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Tally Folly

Citizens doubled my insurance this past year for NO good reason.
Great leadership in Tallahassee for homeowners just squeaking by.
Republicans are sooooooooooo out of touch.

Fasano is a fool

Unfortunately Mr Fasano makes claims such as these and does so in a manner in which no one can provide a definitive response. Mr Fasano claims there are discrepancies based on his assessment. He is a fool.

The media has been fooled

If newspapers were on the opposite side of the issue, they would request documents supporting claims made by Mr Fasano, but my guess is no one from the media will question his claims

Former CPIC Employee

Mr. Wallace has always shown great leadership. It is too bad that politicians kowtow to Public Adjusters and Foundation Companies that wish to continue to eat from the public trough. Senator Fasano should be ashamed, but that would take shame and integrity, something that man is sorely missing.

AntiTallahassee

The Republicans have allowed our state insurance industry to become a disfunctional economic suppressant. Insurers are bigger liars than politicians. We need politicians who will stand up to the insurers. If an insurer is not going to write property insurance, it should not be allowed to write auto insurance.

Josie

Citizen is a company that has grown to be a very large company in a very short length of time. There are things that need to be changed for the beterment of the company.
1. Customer Service.
This area is poor and needs to be changed for the better.

2. Senior Management
Operations
They have a very week VP in charge of operations. They seem to like to cause kaos instead of running a smooth operation. They are running the operation side like they did when it was 100 employees.

1. Very week HR Department
2. Investigations of personnel that have to manage nonperforming employess. These employee complaints on the whole come aftr evaluations or critism of work performance.
They take about 1 year to finish and the cost of time of employees and the outside lawyers is enormous. This could be corrected by a strong HR department with normal corporation regualtions regarding employess.

Steven david

What Every Floridian Ought to Know About Senate Bill 408
As the 2012 Legislative Session begins, a re-examination of SB 408’s discriminatory provisions is warranted. Here’s why:
Under SB 408, the 1.5 million policyholders in Florida who rely in Citizens Property Insurance as the insurer of last resort are being treated differently than every other insured property owner in the State.
Language in SB 408 effectively prevents Citizens policyholders from receiving fair and unbiased claims assistance immediately after a hurricane or other property-damaging event.

• The bill makes it illegal for a policy holder to pay for professional representation from a licensed public adjuster for the initial part of a claim. The bill further restricts how much a policy holder can pay for public adjuster representation after the initial offer, making it economically unfeasible for public adjusters to take on Citizens policy holder claims.
• Restricts the homeowner’s ability to hire a qualified licensed public adjuster due to the fee limitation within the bill.
• Compensation limitations created by the bill prevent public adjusters from assisting policyholders in a cost-effective manner.

These harmful provisions in SB 408 were fueled by false allegations from private insurers and their lobbyists, who blame public adjusters for the state’s rising insurance rates and expansion of last-resort Citizens. Yet the state’s own Office of Program Policy and Government Accountability office (OPPAGA) concluded otherwise in January 2010, finding:

CONSUMERS DESERVE BETTER!
Speak up and help in fixing the discriminatory provisions in SB 408.

Dan

Really Steven david - You must be a public adjuster. What about your client, you know the one that has to give you a % of the claim paid to represent them. What if that client waited until the company paid the claim and discovered that they were made whole? Other than you losing your fat fee what’s the harm? None to the client as they can now fix their home, if they have to pay you from the settlement where the rest of the money going to come from to repair the damage? Never give a Public Adjuster the chance to steal some of you claim payment, unless you discover you can’t fix your home for the amount the insurance company pays. Sometimes adjusting the claim settlement is as easy as getting an estimate or two from a licensed contractor. Using a Public Adjuster should be the LAST RESORT.

Amber Cebull

This is extremely interesting - I'm new to the insurance industry and have started to more actively follow the legislation and politics surrounding insurance.

I've read a lot of articles recently about inspections and increased premiums. I've also spoken to principal at a small insurer in Florida who has provided great insight into how false/fraudulent sinkhole claims. It can't be easy for executives to manage - and I know that working for an Agency that the agents get very frustrated when they can't explain increases in premiums.

Solution may come with all the arising legislation. SB 1860 just came out today too.

Lisa

You can't fake a sinkhole! The Insurance Companies know it but they are the most well funded lobby in Tallahassee. I don't know how you sleep at night. The senior citizens, veterans, that moved here to live out their lives. I live in a neighborhood that is full of sinkholes. Cracked pools, windows that would fall out if pushed the wrong way. Ground Penetration Reports that show a void, and when the drillers come an 8 foot drop of the hammer under it's on weight.
But, the findings are "inconclusive".
The flat fact is that if the Insurance Companies would pay for the damage that the insured had paid for in their premiums the policyholders wouldn't need a Public Adjuster - or an attorney!

Chris hamilton

I work at a dealership and had to deal with this pathetic insurance company for a simple mirror replacement. Hanover/citizens treated my customer like crap and they have not heard The last of me. I found this article and I am not surprised. I am one person, but I can and will make a difference!

Terri K

Citizen's inspected our house last year stating our roof was not compliant. The inspector was a local subcontracted by Citizen's. He was so large that he could not even get up into our attic but he was able to make a negative report. Our roof was replace in '04 due to Hurricane Frances and it passed with flying colors. Now the story has changed and yesterday we received a cancellation letter stating because our roof had less than 3 years of meaningful use. Unless we replace our roof (husband out of work) they are saying goodbye. What world do we live in now that this can happen.

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