- Florida's Citizens Property Insurance Corporation Board Approves Risk Transfer Policy, Investment Management Services
- February 17, 2014
- Law Firm: Colodny Fass P.A. - Fort Lauderdale Office
Florida's Citizens Property Insurance Corporation's ("Citizens") Board of Governors ("Board") met on January 29, 2014. The agenda included action on Citizens' 2014 plan to transfer risk for the purpose of avoiding the likelihood of assessments on Floridians.
At the beginning of the meeting, Citizens' President and CEO Barry Gilway provided the Board with a brief update on the new private market Clearinghouse, which had launched two days prior. On the first day of Clearinghouse operation, almost 1,000 agents and 2,000 users had successfully operated the system, he said. After speaking with CEOs of the participating insurers, Mr. Gilway reported that all were pleased with the program's "exceptional" launch.
Citizens' Chief Financial Officer Jennifer Montero explained Citizens' 2014 plan to transfer risk to the global markets for both reinsurance and capital markets in order to reduce the likelihood of assessments. Citizens is working with reinsurance brokers, underwriters and financial advisers to develop the initiative.
Ms. Montero recommended approval for the development of the risk transfer program for Citizens' Coastal Account to include $750 million maturing Everglades Re Series 2012-1 risk transfer, along with $84 million of expiring traditional reinsurance. She also advised the evaluation of opportunities in both traditional reinsurance and capital markets to further reduce assessment risk, all of which the Board approved. Board Member Tom Lynch recommended second storm coverage also be evaluated.
Also on the agenda was a request for Board approval of 16 multi-year contracts with various recommended vendors to provide investment management services for total estimated fees of over $33 million, based on a $13.5 billion managed portfolio. The contracts will require selected vendors to make investment decisions and ensure strict compliance with Citizens' investment policies. The Board approved this action item.
Citizens Senior Director of Claims Operations Jay Adams talked in detail about Citizens' claims loss history reporting, a budgeted software solution that is currently being used in the Claims business unit and utilized on all new reported claims to check for prior losses. The software is also used by Citizens' Special Investigations Unit in its fraud investigations.
After Citizens had issued an Invitation to Negotiate for a claims loss history reporting vendor contract, only one response was received during December 2013 from Insurance Services Office, Inc. ("ISO"), which is the incumbent for services. ISO was re-approved by the Board as the contract vendor.