CEO 86-12 -- February 20, 1986

CONFLICT OF INTEREST

COUNTY MOSQUITO CONTROL DISTRICT COMMISSIONER PRESIDENT OF INSURANCE COMPANY, A SUBSIDIARY OF WHICH WRITES INSURANCE FOR THE DISTRICT

To: Ms. Joan D. Owens, Administrative Assistant, Collier Mosquito Control District, Naples

SUMMARY:

No prohibited conflict of interest exists under Section 112.313(7), Florida Statutes, where a Mosquito Control District Commissioner is the president of an insurance company, one subsidiary of which is an insurance agency which writes the general liability and property damage insurance policies for the district. As parent and subsidiary corporations are separate business entities for purposes of the Code of Ethics, the district commissioner does not have any employment or contractual relationship with a business entity which is doing business with his agency. CEO's 77-48, 80-88, 80-89, and 82-78 are referenced.

QUESTION:

Does a prohibited conflict of interest exist where a mosquito control district commissioner is the president of an insurance company, one subsidiary of which is an insurance agency which writes the general liability and property damage insurance policies for the district?

Your question is answered in the negative.

In your letter of inquiry you advise that Mr. Thomas V. Porter serves as the Chairman of the Board of Commissioners of the Collier Mosquito Control District. In a telephone conversation with our staff, the Commissioner advised that he is president of an insurance agency which recently, with a number of other agencies, became a wholly owned subsidiary of a Florida insurance corporation. The Florida corporation, of which the Commissioner also serves as president, in turn is owned by a national, publicly held insurance company.

Recently, the District was informed by its insurance agent that the agency would be unable to obtain general liability coverage for the District. As a result, the Commissioner contacted another subsidiary insurance agency of the Florida corporation which he knew wrote insurance for both the Monroe and Lee County Mosquito Control Districts. That agency agreed to write the needed insurance for the Commissioner's District. Although the Commissioner serves as president of the parent corporation of this agency, neither he nor his insurance agency, a sister subsidiary, will receive any commission or remuneration from the policy written for the District. The Commissioner is not an officer, director, or owner of the agency which is writing insurance for the District and he has no employment or contractual relationship with that particular agency.

The Code of Ethics for Public Officers and Employees provides in relevant part:

CONFLICTING EMPLOYMENT OR CONTRACTUAL RELATIONSHIP. -- No public officer or employee of an agency shall have or hold any employment or contractual relationship with any business entity or any agency which is subject to the regulation of, or is doing business with, an agency of which he is an officer or employee . . . ; nor shall an officer or employee of an agency have or hold any employment or contractual relationship that will create a continuing or frequently recurring conflict between his private interests and the performance of his public duties or that would impede the full and faithful discharge of his public duties. [Section 112.313(7)(a), Florida Statutes (1985).]

In previous opinions CEO 80-88 and CEO 77-48 we advised that this provision would prohibit a public official's insurance agency from writing insurance for his public agency, although it would not prohibit the public agency from obtaining insurance from an insurance carrier which he is licensed to represent. Also pertinent to our decision are our opinions CEO 80-89 and CEO 82-78, in which we have treated parent and subsidiary corporations as separate business entities in applying Section 112.313(7).

Here, the subject Commissioner's insurance agency is not writing the insurance for the District; instead, the insurance is being written by a sister subsidiary. Although the Commissioner is president of the parent Florida corporation, that corporation is a separate business entity from the subsidiary which is writing insurance for the District. For these reasons, we find that the subject Commissioner does not have an employment or contractual relationship with a business entity which is doing business with his agency.

Accordingly, we find that no prohibited conflict of interest exists where the subject Mosquito Control District Commissioner serves as president of an insurance company, a subsidiary of which writes insurance for the District.