On September 10, Citizens Property Insurance Corp. sent a letter via its Agency Direct E-Mail system notifying recipients that it was suspending its commercial lines inspection program. The notification read: “Inspection and Outreach Program – Commercial Policy Mitigation Inspections Temporarily Suspended. Citizens is reviewing commercial lines inspections that are part of the Inspection and Outreach Program to identify opportunities for improvement. Effective immediately, all inspection activity for commercial risks is being suspended temporarily. We will send a follow-up communication prior to resuming the commercial lines portion of the program.” Following the notification, Florida Underwriter spoke with Citizens’ Senior Vice President of Underwriting Paul Palumbo and media contact Candace Bunker to get some insight into the decision. “Citizens is planning a significant expansion of the inspection program in 2011, which will include the use of multiple vendors and an increase in the number of commercial inspections,” said Palumbo. “Commercial inspections are extremely complex and detailed and can be hundreds of pages long. This pause is designed to allow us time to perform the diligence necessary to ensure that the commercial inspection requirements we have in place are appropriate, prior to the 2011 expansion.” Bunker reported that when the program was shut down there were approximately 1,900 commercial buildings for which Citizens had ordered an inspection but had not yet received a completed inspection report. Bunker noted that since the start of the program Citizens has received completed inspection reports on approximately 1,200 commercial buildings. “Out of those completed inspection reports that have been provided to Citizens, we have reviewed and processed approximately 450,” she said. “Of the 450 completed inspection reports that have been reviewed and processed thus far, 85.5% (or 385) have shown that at least one feature reflected on the original inspection was incorrect. The most common feature showing a discrepancy to date has been Roof Deck Attachment.” Bunker explained that any commercial property that currently receives mitigation credits is eligible for selection for the reinspection program. “In addition to this characteristic, (the existence of wind mitigation credits) we use selection criteria that focus on risk characteristics that have the highest probability of needed verification like validating compliance with the updated Florida Building Code or proof of roof-to-wall connections,” she said. A date for restarting the program has not been determined.

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