Florida’s Citizens Secures $1.75 Billion for its High Risk Account

June 20, 2008

Florida’s state-backed Citizens Property Insurance Corp., says it has secured pre-event financing of $1.75 billion for its high risk account.

This amount is in addition to the $1.6 billion bank credit line obtained for the personal lines account and the commercial lines account, according to board chairman Bruce Douglas.

“We have completely restructured the liquidity program, which will benefit all Floridians if a disaster were to strike Florida,” said Douglas.

Citizens sold $1.75 billion of one- and three-year securities at yields ranging from 2.5 percent to 4.37 percent. The financing provides Citizens access to cash it may need to pay future claims in its high-risk account.

Additionally, Citizens recently completed the purchase of private reinsurance for the high-risk account for the mandatory co-payment required to access funds from the Florida Hurricane Catastrophe Fund in the event of disaster. The purchase of reinsurance in the high-risk account transfers over $450 million of potential risk and assessments from Citizens’ customers and all Floridians to the private insurance market.

Sharon Binnun, Citizens’ CEO reported that its rating with Moodys increased from A3 to A2 and Citizens has received the highest rating possible for short term municipal credit.”

Source: Citizens Property Insurance Corp

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