THE CAPITAL, TALLAHASSEE, October 18, 2012……..Citizens Property Insurance Corp. on Thursday defended its decision to shutter an internal watchdog unit, while another 100,000 Citizens policies will be taken over by private firms starting in December.

The state Office of Insurance Regulation announced the takeout late Thursday afternoon. Combined with earlier announcements, 318,000 Citizens policies are headed to private insurers.

American Integrity Insurance Co. of Florida, which had already been approved to take-out 50,000 policies in November, is approved for an additional 40,000 in December. Heritage Property & Casualty Insurance Co., licensed in August, has been approved to remove 60,000 policies.

Earlier Thursday, Citizens spokeswoman Christine Ashburn defended the insurer’s decision to close the Office of Corporate Integrity, which had been in charge of monitoring internal office matters, sexual harassment claims and misuse of funds. Four people lost their jobs as part of the move, which was disclosed this week.

The duties of the office, Ashburn said, have been reassigned to other divisions within Citizens, including the Office of Internal Audit, the Ethics Officer and the Employee Relations Office.

Citizens also plans to hire four forensic accountants trained to track potential corporate fraud and abuse. Those positions have yet to be filled.

“We believe these changes strengthen our ability to ensure Citizens employees operate with the highest level of integrity,” said Citizens President Barry Gilway, in a statement.

The state-backed insurer has come under fire recently for travel expenses and other expenditures that occurred before Gilway took over earlier this summer. The Citizens board of governors has since enacted more stringent travel and expense guidelines.

The insurer is also in the middle of a controversial proposal to provide $350 million in loans to private companies willing to take policies off its hands. The low-interest loan proposal is undergoing an outside review after concerns were raised by key lawmakers and others.

On Thursday, Gov. Rick Scott sent a letter to Gilway in which he said Citizens must maintain a high level of quality assurance so that customers and taxpayers can be assured the insurer is running a tight ship.

Scott said disbanding the Corporate Integrity office before having other watchdogs already on board was “troubling.” He urged Gilway to use “greater caution with future modifications affecting internal investigations, audits and compliance.”

“While I understand your desire to reduce redundancy and create efficiencies within Citizens, such efficiencies cannot be achieved at the expense of accountability, transparency, and compliance,” Scott wrote.

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