A Florida state senator is demanding that executives of the state-backed property insurer be questioned after expense reports showed that they spent thousands of dollars on travel and related expenses.
Florida Senator Mike Fasano (D-New Port Richey) sent a letter Florida Cabinet members demanding that they review the expenses of Citizens Property Insurance Corp. executives after several newspaper articles detailed thousands of dollars spent on international travel and associated costs.
The expense reports detailed thousands of dollars in airline, hotel and meal charges, many of which were tied to trips to Bermuda, New York, Zurich and London. They included airline tickets costing more than $2,000 per person and hotel bills ranging from $300 to $600.
Fasano criticized the level of the expenses, especially given the policyholder rates charged by Citizens.
“Citizens top executives and board members, past and present, have been shameless in the way they lavishly spend tax dollars on travel expenses whether it be staying in posh hotels when other options are available or eating expensive meals,” wrote Fasano. “In times like these where so many families are struggling to pay their property insurance bills, these actions are unconscionable.”
Responding to Fasano’s letter, Citizens President Barry Gilway defended the need for international travel, saying it is important for the insurer as part of its efforts to purchase reinsurance and issue bonds.
In May, Citizens issued $750 million in bonds through Everglades Re Ltd, a Bermuda-based special purpose reinsurer set-up to handle the largest insurance-linked security deal of its kind. Some 32 investors participated in the deal, which exceeded Citizens leaders’ expectations.
That deal included significant travel on the part of Lacasa, Chief Financial Officer Sharon Binnum, and staff members.
Gilway said that as a result of that travel, Binnun achieved savings of about $47 million that reduced the potential assessments on Florida policyholders by $1.5 billion.
However, Gilway in a letter to the Cabinet, expressed his concern over travel expenses.
“As a government entity operating in an international industry, Citizens walks a fine line between fiscal stringency and the need to conduct business internationally on behalf of all Floridians,” wrote Gilway.
At a recent Citizens Board of Governor’s meeting, Board Chair Carlos Lacasa also defended the trips as necessary to executing the catastrophic bond deal.
“You can’t convey this in a memo, you have to look at these people eye to eye,” he said.
At the request of Lacasa and Chief Operating Officer Jeff Atwater, Gilway is slated to present a review of the insurer’s travel budget and recommendations for changes at its September 7 board meeting.
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