Luiz is currently sidelined with a knee injury and has heavily been linked with a January departure from the club after allegedly falling out with 'Blues' boss Antonio Conte following the 3-0 humbling at the hands of Roma in the Champions League in October.
However, Flo, who represented the club over a hundred times and now works there as a coach and ambassador insists that the reports in the press do not match what he has been seeing on a day-to-day basis.
"He's a very lively player and to me there doesn't seem to be any problems at all," explained the Norwegian.
"He is injured for the moment, so I don't really understand all this stuff going on in the press. To me, it's just a player who for the moment is injured and seems to be very happy at the club."
Meanwhile, Flo, who also represented Sunderland and Leeds during his playing career admitted to being impressed by summer recruit Alvaro Morata.
"I'm really impressed with him. When I see him play he makes smart movements and he's a good finisher - even with the head, which is nice to see nowadays," said the 44-year-old.
"Where he's got to learn is probably in the build-up play, which is tougher in the Premier League than what he has been playing in before.
"A bit to learn, but as soon as the ball comes into the box, he's been very good. I would give him a bit more time, and I think he will be even better."