Citizens Board of Governors Announces $1.75 Billion in Pre-Event Financing; Chairman Douglas Retires From Board

Today, June 19, 2008, Citizens Property Insurance Corporation (“Citizens”) announced the securing of 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.

Citizens also announced today the decision of Board of Governors (“Board”) Chairman Bruce Douglas not to seek reappointment.  The press release regarding the retirement of Mr. Douglas from the Board is reprinted subsequent to the financing announcement below.

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Citizens Board of Governors Announces $1.75 Billion in Pre-Event Financing

TALLAHASSEE: Citizens Property Insurance Corporation announced at its Board of Governors meeting in Jacksonville that 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. 

“We have completely restructured the liquidity program, which will benefit all Floridians if a disaster were to strike Florida,” said Bruce Douglas, Chairman of Citizens Property Insurance Corporation’s Board of Governors.  Sharon Binnun, Chief Financial Office for Citizens Property Insurance Corporation added “I am also pleased to announce that Citizens’ rating with Moodys increased from A3 to A2 and Citizens has received the highest rating possible for short term municipal credit.”

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. 

“With this issuance along with the other financially prudent decisions, Citizens will have more than $20 billon of claims-paying capacity,” said John Forney, managing director with Raymond James, Citizens’ financial adviser, who added the financing was “a reasonable deal under completely unreasonable market circumstances.”

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.

 

Citizens Board of Governors Chairman Announces Retirement 

TALLAHASSEE: Today, Citizens Property Insurance Corporation Board of Governors’ Chairman Bruce Douglas announced at its meeting in Jacksonville that he has decided not to seek reappointment to the Board. 

“This was a very emotional and difficult decision for me since I have been part of the tremendous progress and evolution of Citizens over the past 6 years,” said Bruce Douglas.  “The people of Florida can be proud of the kind of organization Citizens has become.”

After serving the residents of Florida for the past 6 years and after many challenges and accomplishments, Bruce Douglas told fellow Board members and the audience of his decision to retire from public service and return to assist with the growth of his sons’ family-owned business.

Appointments of all Board members expire on July 31, 2008.  The Governor, Chief Financial Officer, President of the Florida Senate and Speaker of the Florida House appoint Citizens’ Board of Governors.

 

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