Biz group releases Citizens Insurance map, hoping to get lawmakers to act

Hoping to convince lawmakers to make significant reforms on the politically thorny issue of property insurance, a business group has released an interactive map showing legislators how many of their constituents are covered by Citizens Property Insurance.

The idea is to get lawmakers to realize that, in most cases, the majority of their constituents get coverage in the private market, not from government-run Citizens. That realization would theoretically make it easier for lawmakers to back legislation raising rates at Citizens.

“This is the first time we’ve looked at the data this way and it’s very telling. More than two-thirds of residents in a majority of Senate and House districts don’t have Citizens as their property insurer,” said Associated Industries of Florida president Tom Feeney in a statement.

AIF is pushing for major reforms, many of which will lead to higher insurance rates for property owners covered by Citizens, and potentially for those covered by private insurers as well. AIF says the threat of those "hurricane taxes" is bad for business. Citizens, the largest insurer in the state with 1.3 million policies, covers about 23 percent of the market.

If the company—which is running a record surplus—ever runs out of money after a massive monster hurricane, it might have to levy “assessments” on Florida consumers to make up the shortfall. Federal and state taxpayers may also pick up some of the tab, as has happened in the past after devastating storms.

Property insurance has been a tough political football because of the pocketbook impact it has on homeowners. In places like South Florida, where Citizens dominates the market, the typical family spends about 5 percent of its income on property insurance, much higher than state and national averages.

Those homeowners are very vocal come election time, so Republicans in South Florida and other high-cost coastal regions have been wary of voting for business-backed insurance bills in the past. Democrats have joined those wary Republicans to kill bills that the insurance industry wants and this year the minority party has made keeping insurance costs down part of its platform.

Federal court rejects Florida's welfare drug-testing appeal

A federal appeals court upheld the temporary ban on Florida’s drug-testing for welfare recipients Tuesday, saying that a lawsuit against the state had a good chance of succeeding.

The 11^th Circuit Court of Appeals in Atlanta sided with a lower court decision, stating that Florida failed to show that the drug testing plan was so critical that the Fourth Amendment, which bars unreasonable searches by the government, should be suspended.

The decision—which did not weigh in on the ultimate constitutionality question—is the latest development in Gov. Rick Scott's controversial drug testing push. In 2011,Scott and the Florida Legislature instituted a program for drug-testing all recipients of Temporary Assistance for Needy Families. Luis Lebron, a single-father and TANF applicant who refused to take the test on constitutional grounds, filed a lawsuit with help from the American Civil Liberties Union.

In authoring the court’s opinion, Circuit Judge Rosemary Barkett said that Florida had not proven that its drug-testing program serves a “special” or “immediate” need, or that it even protected children in families with substance abuse.

“There is nothing so special or immediate about the government’s interest in ensuring that TANF recipients are drug free so as to warrant suspension of the Fourth Amendment,” Barkett wrote. “The only known and shared characteristic of the individuals who would be subjected to Florida’s mandatory drug testing program is that they are financially needy families with children.” 

Scott vowed to appeal the decision and take his fight to the Supreme Court.

“The court’s ruling today is disturbing," he said in a statement. "Welfare is 100 percent about helping children. Welfare is taxpayer money to help people looking for jobs who have children. Drug use by anyone with children looking for a job is totally destructive. This is fundamentally about protecting the wellbeing of Florida families. We will protect children and families in our state, and this decision will be appealed to the Supreme Court.”

The court relied on a similar case in Georgia, which struck down the state’s program for requiring all political candidates to take drug tests. That case found that Georgia did not show that there was a drug problem among elected officials, and the law was mostly “symbolic.”

In the rejecting Florida’s appeal to the lower court's preliminary injunction, Barkett took a similar position. 

“The State has presented no evidence that simply because an applicant for TANF benefits is having financial problems, he is also drug addicted or prone to fraudulent and neglectful behavior,” she wrote.

The ACLU's associate legal director Maria Kayanan said the ruling was a vindication for struggling families who apply for government assistance.

"The state of Florida can’t treat an entire segment of our community like suspected criminals simply because they are poor and are trying to get temporary assistance from the government to support their families,” said Kayanan, who was lead counsel on the case.

Florida also passed a law last year requiring drug testing for all state workers, but that issue is also tangled in constitutional challenges and litigation. 

@ToluseO

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Stand Your Ground task force: It's a good law

A 19-member task force commissioned by Gov. Rick Scott to review Florida’s Stand Your Ground law has put out its final report, largely voicing its support for the law.

The task force made a handful of recommendations for the Legislature, but began the report by stating that, at its core, the self-defense law is fine as it is.

“All persons who are conducting themselves in a lawful manner have a fundamental right to stand their ground and defend themselves from attack with proportionate force in every place they have a lawful right to be,” the report reads.

The controversial law grants immunity to people who use force, including deadly force, in response to a perceived threat of bodily harm. It was thrust into the spotlight last year after Miami Gardens teenager Trayvon Martin was shot to death in Sanford by a man who later claimed self-defense under Stand Your Ground. The shooter, neighborhood watch volunteer George Zimmerman, was initially not charged, but now awaits trial on second-degree murder charges.

Lt. Gov. Jennifer Carroll chaired the task force, which held statewide hearings and consisted of two lawmakers who drafted the Stand Your Ground law and others who voted for it. Police, lawyers and neighborhood watch volunteers were also appointed. Critics blasted the group's makeup from the outset, predicting that it would not push for any significant changes to the law.

The recommendations the group did come up with include reconsidering the state’s 10-20-Life law, tightening standards for neighborhood watch groups and commissioning a study to look into issues of racial disparities and unintended consequences of Stand Your Ground.

The task force also urged the Legislature to consider whether Stand Your Ground should apply when an innocent bystander is caught in the crossfire and to clarify whether or not the law’s immunity provision prohibits police from detaining and questioning a shooter.

Two task force members -- Miami-Dade State attorney Katherine Fernandez Rundle and Tallahassee-based pastor Rev. R.B. Holmes -- each submitted letters indicating they wished the group had pushed for more significant changes.

“I have also seen not only from the experiences in my Office, but from the testimony of our citizens and experts who came before our Task Force, that the law has had some consequences which I believe were unintended,” Fernandez-Rundle wrote in a letter attached to the report. She said the law’s “immunity” provision should be scrapped.

Scott: Citizens execs should return 'outrageous' raises

Gov. Rick Scott blasted top executives at Citizens Property Insurance for “foolish” behavior Wednesday, calling on them to give back large pay raises they received last year.

“First off, they have these outrageous pay raises,” Scott said in an interview “They ought to give that back. Those ought to go back.”

The raises, first reported by the Herald/Times, came as the state-run company was increasing homeowners’ insurance rates and scaling back coverage. Scott said no one told him about the pay hikes—which were as large as $31,000—and made it clear that he did not approve.

Citizens has been through a number of controversies in the last year as news of the company’s spending habits has come to light. Expenditures unearthed by the Herald/Times, independent auditors and Scott’s chief inspector general include gourmet dinners, alcohol, international travel and stays in $600-a-night hotels.

A Citizens spokesperson said the company will "revisit" its board-approved compensation plan and "make a revised recommendation at the March meeting."

In a Wednesday opinion piece in the Bradenton Herald, Citizens’ board chairman Carlos Lacasa said that the company has “sound internal governance” and the raises were merited due to increased responsibilities and comparisons with the private insurance industry.

"The raises also followed three straight years of no merit raises and were accompanied by a decrease to benefits in the form of increased health insurance premiums and higher co-pays,” Lacasa wrote.

Scott said that his staff had heard Citizens’ rationale for raising the salaries, but he remained critical of the pay increases, which went out to some of the highest-paid execs at the state-run insurer. Employees at state agencies have not received a raise in six years.

On several occasions, Scott made mention of executives’ use of the corporate credit card to buy alcohol, including purchases brought to light by Chief Inspector General Melinda Miguel.

Citizens responded to Scott’s inspector general by saying that Lacasa had reimbursed the company for $300 in alcohol purchased at a company dinner last June. Receipts obtained by the Times/Herald show that seven or eight officials at Citizens ordered about $369 of red wine and Grey Goose Vodka during a $918 dinner at Orlando’s Ocean Prime restaurant.

“We shouldn’t be reimbursing them for alcohol,” Scott said. “This is a state organized entity. It shouldn’t be any different.”

New 'Smart Justice' bill would offer treatment for drug offenders

A new proposal announced Tuesday—dubbed “Smart Justice”—would change the way Florida deals with non-violent drug offenders.

The bill seeks to reduce recidivism by redirecting some non-violent offenders from high-security prison into re-entry and drug treatment programs.

“It’s time that we change the way we’re doing business,” said Sen. Thad Altman, R-Viera, who is co-sponsoring the measure. “We’re in the modern days, the 21^st century. But in many ways our criminal justice system is still in the Middle Ages.”

Inmates in the last three years of their sentences would be potentially eligible for the program. New “Correctional Re-entry Treatment Facilities” would be created—and run by private providers—to take in the non-violent offenders.

Rep. Dennis Baxley, an Ocala Republican who chairs the House’s Judiciary Committee, is also sponsoring the measure. He said it would help reduce recidivism in Florida’s prison system.

“The ideas contained in this legislation will make a meaningful difference,” Baxley said in a statement. “Not just in the lives of offenders, but more importantly in the lives of Floridians who might otherwise become their future crime victims.”

Fasano uses obscure committee post to blast Citizens Insurance

The gloves came off Monday and it was Rep. Mike Fasano vs. Citizens Property Insurance, Round 1 for the 2013 legislative session.

Fasano, a New Port Richey Republican who was conspicuously snubbed from a post on the Banking and Insurance Committee, used his chairmanship of an obscure joint committee to berate what he believes is an anti-consumer culture at Citizens.

As chair of the Joint Administrative Procedures Committee, Fasano held court over a number of state agencies who had failed to comply with state laws passed by the Legislature.

Last on the list was Citizens, which was supposed to begin offering a less comprehensive—and less expensive—policy option on Jan. 1, but has not yet done so.

“You said Citizens is concerned about the consumer. I laughed at that,” said Fasano, during a spirited back-and-forth with Citizens’ legislative director. “They’re more concerned about depopulating and raising premiums.”

Citizens countered that the company was working as hard as it could to implement the new policy, called an HO-8. The new policy is scheduled to begin rollout next week.

But Fasano is not happy with the way Citizens is implementing a law passed by the Legislature in 2012. The law calls for Citizens to offer the HO-8 policy, but the company is only planning to offer it to homeowners with homes that are at least 51 years old, and worth less than $200,000.

“We believe we are following the law,” said Citizens spokesperson, Christine Ashburn. She said the HO-8 policy offered by Citizens has certain "underwriting guidelines," just like all other policies. Those guidelines--the age and value requirements--were approved by the Office of Insurance Regulation, whom Fasano also blasted.

As insurance premiums rise, Citizens execs get big pay hikes

When the president of Citizens Property Insurance Corp. learned that his chief financial officer had used corporate funds to finance a luxurious weekend at a $633-a-night resort in Bermuda, he initially described the expenses as “absolutely appropriate.”

But President Barry Gilway changed his tune after a Herald/Times story and a subsequent inspector general report documented evidence that executives regularly ran up huge expenses on the company credit card, traveling and dining at four-star locations across the globe.

“As guardians of public funds, we must hold ourselves to a more rigorous standard,” he said.

It was a full-throated mea culpa, following sharp rebukes from Gov. Rick Scott, state Chief Financial Officer Jeff Atwater and top lawmakers. But behind the scenes, Gilway was quietly handing out huge salary raises for the well-traveled CFO, Sharon Binnun, and several other executives who run the state-backed company.

Read more here: 

 

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After series of scandals, Citizens moves to become more like a state agency

After a series of corporate scandals, Citizens Property Insurance Corp. is hoping to conduct itself less like a high-flying private insurance firm and more like a government agency.

Blasted by regulators, investigators and lawmakers for lavish spending on travel and meals and poorly negotiated contracts, Citizens has agreed to remake parts of its operation using government as a model.

The state-run insurer of 1.3 million policyholders announced Friday that it will begin to implement procurement policies and travel guidelines that mirror those used by other state agencies. The Office of Insurance Regulation rapped Citizens last month for de-emphasizing price negotiation as it gave out $604 million in contracts to private companies. As a quasi-governmental entity, Citizens has operated under separate rules from most of Florida's government.

Also on Friday, Gov. Rick Scott’s chief inspector general released a final report on the company’s spending on travel and meals. As part of the report, Citizens agreed to adopt travel policies that “more closely mirror” those that govern state employees.

 “Citizens is aggressively looking for ways to tighten its financial belt,” said Citizens President/CEO and Executive Director Barry Gilway, in a statement.

Citizens has long insisted that it is not a government agency and should not be held to state limits on travel and food spending. Auditors have questioned Citizens’ rationale for this position since 2006, but the company ignored those concerns. Last year, the Herald/Times documented how Citizens’ loosely defined travel policies have allowed executives to charge the company hundreds of thousands of dollars for luxury hotel stays, limousine rides and expensive dinners.

As late as December, Citizens executives were arguing that the company—which received $715 million from taxpayers, has the ability to levy “hurricane taxes,” and claims governmental immunity in court—was not bound to rules governing state agencies. After Scott’s inspector general drafted a scathing report, Citizens agreed to follow the state’s travel rules, which would ban many of the luxurious expenses company execs have become accustomed to.

Some of the expenses flagged by reporters and inspectors include:

- More than $1,000 for a limousine ride and personal chauffeurs/car service for Citizens’ interim president and CFO.

-$236 for six-hour “day-use” of a hotel in Zurich, Switzerland, for the company CFO.

-$454,000 for “car expenses” between January and August 2012.

-$539 per night hotel stay in New York for top officials

The company offered explanations for many of the expenditures in a response to the inspector general report but agreed that stricter policies were necessary.

Meanwhile, the company has pushed to raise rates on homeowners and slash their coverage.

Citizens has also faced scrutiny over allegations of misconduct among its top executives, some of who later resigned and got large severance packages.

After Herald/Times stories about Citizens move to fire four investigators who were looking into the allegations, Scott called on his inspector to probe the company again.

That probe is ongoing, but some lawmakers are already pushing for more scrutiny.

Bills filed in the Legislature and backed by Scott would define Citizens as a state agency for the purposes of having an independent Inspector General. Citizens is supporting the proposal.

“According to reports in The Miami Herald late last year, an internal audit brought to light issues at this company charged with being stewards of public funds,” said David Richardson, D-Miami Beach. “The firing of four auditors who were responsible for reporting these indiscretions and completely disbanding the Office of Corporate Integrity has led me to believe that officials at Citizens may think they can operate without accountability, which I find appalling.”

@ToluseO

For the first time, Gov. Rick Scott needs votes from Democrats

For the first time in his brief and turbulent political career, Gov. Rick Scott needs a little help from Florida’s Democrats to turn one of his wishes into law.

Scott’s top legislative priority this year — a $141 million tax cut for manufacturers — comes with an asterisk: It has to garner ‘Yes’ votes from two-thirds of the Legislature to pass.

That means Democrats — whose gains in November breached the Republican supermajorities in Tallahassee — suddenly find themselves in an unfamiliar power position as they try to defeat Scott in 2014.

“I doubt that’ll be able to get a supermajority,” said Rep. Perry Thurston, a Plantation Democrat and minority leader in the Florida House. “It’s just another [business] incentive. We don’t know if it works.”

The bill seeks to eliminate sales taxes on all manufacturing equipment and machinery.

Scott has already put considerable political capital behind the tax cut, stating on numerous occasions that this was his top priority for 2013, along with a $1.2 billion boost in education funding.

“We need to build up manufacturing jobs in the great state of Florida,” he said in unveiling a $74.2 billion budget plan last month. Scott said the tax cut would create jobs and increase exports.

A failure on the measure would be politically embarrassing for Scott, who has staked his governorship on job creation and CEO-like efficacy.

Read more here: 

 

UF - FSU rivalry heats up in State Senate

The rivalry between University of Florida and Florida State University may have cooled on the football field in recent years, but it might get hot this year in the State Legislature thanks to lawmakers with strong school ties.

Gov. Rick Scott’s proposes to award the University of Florida $15 million in an effort to boost it into the upper ranks of higher education. That money is tucked in with $118 million for operation expenses, in lieu of a tution increase, and $167 million tied to performance for the 11 universities in the system.

On Wednesday, however, Sen. John Thrasher, who graduated from Florida State University in 1965 and from its law school in 1972, asked Scott’s budget director if other schools, without naming names, could get the same money that UF is getting.

“In higher education, one particular school it looks like you want to get into the top 10 and I recognize that, I assume the governor wouldn’t have a problem with additional funding to help a couple of other universities to maybe move up the ladder a little bit either, would he?” asked Thrasher, R-St. Augustine.

Scott's budget director, Jerry McDaniel, said he would refer the question to Scott. Minutes later, Senate Appropriations Chair, Joe Negron, amplified Thrasher’s request, putting it in stark school terms.

“If we’re going to spend $15 million for UF, which I think is a great idea, we should give an equal amount to FSU,” said Negron, R-Palm City, who on the face of it has no dog in this hunt, having graduated from Stetson University. “So I look forward to working with (Sen. Bill) Galvano on that.”

Galvano, R-Bradenton, chairs the Senate Education Appropriations Committee. Oh yeah, he also graduated from UF in 1989, FSU’s rival. He said after the meeting that he supports the $15 million boost for UF and that he wasn’t interested in spreading the bonuses to other schools, at least this year.

“We have to get to that point of having a world class university within the state of Florida to break that glass ceiling if you will for our state university system,” Galvano said. “I applaud the governor for taking that step and making that move. If you’re bold with the leading university, it follows that the others will come on line in the future. But when you just try to create some sort of equitable mediocracy, we’re not going to end up with that top tier university.”

So did that mean he didn’t want to provide any money for FSU?

“We need to look at the University of Florida for what it is and the potential for what it has,” Galvano said. “With regard to the other universities, to try to create funding just to create equity within a single year budget shouldn’t be the goal. If we have an opportunity to get that world class university ranking as a state we should do it.”

Afterward, Thrasher clarified his comments. He said he thinks FSU should get the same amount that UF gets.

“I’d be in favor of it,” Thrasher said. “Florida State has a plan. It’s not like they’re just pulling $15 million out of the air. There is a need to have these two universities elevated, no question about it. I’m for everybody being raised up if there are other resources for it.”

No word yet from the House and how its leaders feel about UF vs. FSU. But keep in mind, House Speaker Will Weatherford's brother, Drew, was a star quarterback for the Seminoles. And his father-in-law, former House Speaker Allan Bense, now sits on the Florida State University Board of Trustees.

In other words, don't count FSU out just yet.