- Florida's Citizens Property Insurance To End 2004-2005 Emergency Assessment Two Years Early
- September 26, 2014
- Law Firm: Colodny Fass P.A. - Fort Lauderdale Office
Assessments to Florida property insurance policyholders used for debt service following the devastating 2004-2005 hurricane seasons will end two years early under a recommendation approved by Citizens Property Insurance Corporation's ("Citizens'") Board of Governors at its meeting in Winter Park, Florida today, September 24, 2014.
By unanimous vote, the Board approved the cessation of the 1 percent Emergency Assessment that began in 2007 to pay off a 10-year, post-event bond with a total cost of $1.38 billion.
Following the eight named storms of the 2004-2005 hurricane seasons, Citizens faced a deficit of more than $1.7 billion. Florida lawmakers responded by appropriating funds to eliminate some of the shortfall, while establishing requirements for the repayment of post-event bonds.
In 2007, Citizens began collecting a 1.4 percent emergency assessment from all Florida property insurance policyholders. The assessment was reduced to 1 percent in 2011 in response to growth in the policyholder base from which the assessment was collected.
At today's meeting, Citizens' Chief Financial Officer Jennifer Montero told Board members that the State-run insurer is expected to have sufficient resources in place by June 2015 to satisfy the bond's balance. The assessments originally were scheduled to be collected through June 2017.
"When we came before the Board last year, we recommended continuation of the 1 percent rate for another year in anticipation of the large reduction in the future, or even early elimination of the assessment," Montero said. "We recommend the emergency assessment be eliminated two years early, effective July 1, 2015."
A full report on today's Board meeting is forthcoming.