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Citizens' goal: regain public's trust

The director of the state's insurer of last resort discusses the troubles the company has endured, and plans to emerge from it.

By LOUIS HAU
Published October 6, 2005

ST. PETERSBURG - The chief operating officer he hired, his company's chief financial officer and the company's controller have resigned in the past two months amid allegations of corruption or conflict of interest.

Given this troubling backdrop, Bob Ricker, the beleaguered executive director of Citizens Property Insurance Corp., acknowledged Wednesday that the scandal-engulfed, state-run property insurer of last resort has much work to do to regain the public's trust.

"Because we are a publicly funded . . . entity and we have to have that public trust or earn back that public trust, I'm very committed to Citizens and making it work," Ricker said during a wide-ranging meeting with the editorial board and reporters of the St. Petersburg Times.

In September, then-Citizens chief operating officer R. Paul Hulsebusch resigned his $150,000 position amid allegations that he had accepted kickbacks from insurance adjusters, including a $28,095 "Big Dog" motorcycle. In August, then-Citizens chief financial officer Jessica Buss and controller Corey Neal resigned after they were found planning the launch of a "takeout" company, which would be eligible for bonuses from Citizens to assume the insurer's higher-risk policies. Citizens insures Florida homeowners who cannot find insurance coverage in the open market.

Documents obtained last month by the Times revealed that Hulsebusch, Buss and Neal had planned to start a takeout company with Citizens board member Edward London, who left the board Aug. 1.

"It was very embarrassing. It was unacceptable," Ricker said of his former executives' conduct. "We are taking, I think, an even tougher stance on even the perception of a conflict."

Allegations of wrongdoing by the ex-Citizens executives have spurred investigations by state Chief Financial Officer Tom Gallagher and legislators.

Citizens board chairman Bruce Douglas told the Times on Wednesday that the insurer is being investigated by the FBI and the Florida Department of Law Enforcement. FDLE spokesman Tom Berlinger said he wasn't aware of any such probe.

Ricker said the multiple investigations were "time consuming, but we're committed to it," adding that, "we've got to figure out exactly what happened, especially with the Hulsebusch situation."

Ricker defended Citizens general counsel Michael Colodny, who recently agreed to stop his longstanding practice of allowing a partner at his Fort Lauderdale law firm represent outside insurers before the Citizens board.

"Mike never asked for special treatment," Ricker said, adding that Colodny "was always very careful to announce" instances when his law partner was representing an outside party.

Douglas told the Times that Citizens has been "getting some darn good cooperation from legislators" as it deals with the aftermath of the recent revelations.

Douglas, originally appointed to Citizens' board by Gallagher, was reappointed in August.

While Gallagher appointed the 3-year-old company's first board of directors, legislators recently diluted his control over the board and arranged for directors to be appointed by the Legislature and the governor, too.

"The Citizens board that took office Aug. 4 is totally, totally responsible to the Legislature, not to any individual constitutional officer," Douglas said, adding later that, "there is no political allegiance that we have as a board to anybody."

Douglas said he wasn't troubled by Colodny's recent show of public support for Gallagher's race for governor. Colodny and law partner Fred Karlinsky were among the hosts of a $500-a-person Gallagher fundraiser last week.

"I can't police people's lives," Douglas said. "Who they back, that's fine. How does that relate to Citizens? Zero."

Douglas also said he didn't object to Gallagher's proposals to improve transparency and accountability at Citizens, which includes the creation of a joint Legislative committee to oversee Citizens and other quasigovernmental insurers.

Despite criticism that Citizens was slow and inefficient to pay policyholder claims during last year's hurricanes, Ricker said the insurer has "plenty of claims-paying capacity" with about $2-billion in cash and cash equivalents.

"We do not believe we'll be in deficit for the plan year (2005) for any of the accounts," he said.

Information from Times files was used in this report. Louis Hau can be reached at hau@sptimes.com or 813 226-3404.

[Last modified October 6, 2005, 01:13:15]