View this article online: https://www.insurancejournal.com/news/southeast/2014/08/08/337143.htm
Florida Governor Rick Scott is calling on the top official of the state-backed property insurer to explain why the insurer has deviated from its limitations on overseas travel.
Citizens Property Insurance Corp. officials traveled to London and Zurich as part of securing a $3.1 billion risk transfer program. A review of the officials’ expenses reveal that recently named Board of Governor’s Chair Chris Garner was reimbursed at a slightly higher amount than Citizens’ guidelines.
Gardner repaid the overage, but that was not enough for Scott, who had previously called for Citizens to change its travel policies after a chief inspector general issued a report in 2012 detailing excessive overseas spending by top offcials at the state-backed insurer.
That report resulted in then newly-named Citizens President Barry Gilway imposing strict guidelines on travel.
Karl Rasmussen, the governor’s director of Cabinet Affairs, in a letter to Gilway requested that he appear at an August 19 Cabinet meeting to explain the international travel.
“Governor Scott is specifically interested in hearing more about the purpose of multiple international trips and to learn more about why Citizens believes these trips are necessary for board members to successfully fulfill their duties,” wrote Rasmussen.
Citizens spokesperson Michael Peltier said the international travel, which included trips to Boston, New York, Zurich and Bermuda, were necessary to secure the risk transfer program that the insurer put in place for the 2014 hurricane season.
The risk transfer program equaled $3.1 billion and included a $1.5 billion catastrophic bond deal that is the largest of its kind on record. The bond deal was facilitated through the Bermuda-based Everglades Re. Ltd., which was created specifically to issue the bonds.
Peltier said those meetings had to be conducted offshore since the entities involved are foreign-based companies. More to the point, he said, Citizens has a new board chair, Gardner, a new chief financial officer, Jennifer Montero, and a new chief risk officer, John Rollins.
“As new personnel, President Gilway felt it was necessary to meet face-to-face with the companies that Citizens does substantial business with,” said Peltier.
Peltier said that the amount in question is a minor. He said expenses for Montero and Rollins fell within Citizens’ international guidelines, which are based on the State Department guidelines.
Expenses for Gardner, a late addition to the Bermuda trip, for a two-night hotel stay exceeded the guidelines by a total of $104.
“We thought we had some flexibility when regard to the state department guidelines,” said Peltier. “When we informed the chairman, he [Gardner] promptly reimbursed Citizens.”