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Citizens insurance clearinghouse delayed, compared to healthcare.gov

By Charles Elmore - Palm Beach Post Staff Writer



Whoops, the launch of a new computer clearinghouse designed to shrink state-run property insurer Citizens is being delayed almost a month — and a comparison to the federal health care website reared its head Tuesday.

The system has features “not unlike the technology of healthcare.gov,” Citizens Property Insurance Corp. president Barry Gilway told the Florida Senate banking and insurance committee.

Old launch date: Jan. 2. Now it’s Jan. 27 for the system designed to steer customers from Citizens to private insurers.

A Citizens spokesman later clarified, “The similarities are solely the fact that both are computer based systems that try to link consumers with carriers in real time or near real time.”

Company officials said the postponement is driven by technical matters. As it happens, the delay also serves to weaken any appearance of favoritism to a start-up insurer that gave $110,000 to Gov. Rick Scott’s Let’s Get to Work political committee.

Heritage Property and Casualty Insurance Co. of St. Petersburg will join six other carriers ready to grab would-be Citizens customers at the revised date, Gilway said. At an earlier stage, Heritage was one of just four companies poised to gain new business Jan. 2. Citizens officials said inclusion is based on who is technologically ready to participate, and other carriers are slated to join later.

Heritage officials and the governor’s office have dismissed any link between the company’s $110,000 contribution to the committee associated with Scott and a deal most other insurers did not get — one that paid Heritage up to $52 million to take Citizens customers in the spring. After some customers opted out and a small number of claims were paid, the company netted about $30 million, according to Citizens.

Company officials defended it as a bold and innovative way to transfer risk near hurricane season, though they later pledged to review such procedures as the bypassing of the normal board committee process and divided 3-2 approval by a minority of the Citizens board in May. John Wortman, a board member appointed by Scott, made a motion to approve the deal.

Overall, efforts to shrink Citizens are working, Gilway told Florida Cabinet officials. From 1.5 million customers just over a year ago, Citizens expects to downsize to 925,000 policies by the start of the 2014 hurricane season and around 725,000 policies by the end of 2015, Gilway said.

In Palm Beach County, Citizens has shrunk to 110,000 customers, still the market leader but down about 15,000 in a month, records show.

Also on Tuesday, the Cabinet appointed Bruce Meeks as Citizens’ first inspector general. He is a Tallahassee attorney who spent nearly eight years in a similar role with the State Board of Administration. Citizens board Chairman Chris Gardner said, “Any time we increase transparency and oversight capabilities at Citizens, we improve the public confidence and everybody benefits.”

The clearinghouse goes a step beyond past transfer efforts, in which private insurers have made offers to take blocks of, say, 25,000 or 100,000 Citizens customers at a time. Individual customers have the right to remain with the state-run insurer if they choose.

The clearinghouse works differently. It is designed to make property owners ineligible for Citizens in the first place if a private insurer is offering coverage with premiums up to 15 percent higher. By the second quarter of this year, company officials say the system will be also begin processing Citizens customers who are renewing policies. They will automatically be transferred to private insurers offering equal or lower premiums.

“If three weeks is not enough, I’d rather you take the time you need to do it right,” said insurance committee member Sen. Jeff Clemens, D-Lake Worth.

Committee chairman David Simmons, R-Maitland, took a different view: “I don’t know if some of us would be forgiving if Jan. 27 comes and it isn’t there.”

Gilway, who volunteered the healthcare.gov reference without any prompting, said the point is to get it right.

“When we introduce this, we want to be absolutely sure we’re successful,” Gilway said.

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