Citizens Finance and Investment Committee Meeting Summary

The Citizens Property Insurance Corporation (“Citizens”) Finance and Investment Committee (“Committee”) held a meeting on Wednesday, January 23, 2008 to discuss market issues and the hiring of reinsurance brokers for 2008. To view a copy of the meeting agenda, click here.

Chairman Bruce Douglas called the meeting to order with Committee members Andy Bennett, Sharon Binnun, Earl Horton, Jr., Jay Odom and Richard DeChene in attendance. Also in attendance was Citizens’ Financial Advisor John Forney.

Ms. Binnun gave an update on Citizens’ market investments, including an update on State Board of Administration (“SBA”) managed bond proceeds. The Committee agreed that it is very comfortable with the SBA “Pool A” investments and reasonably comfortable with “Pool B” investments. To view the complete market updates, see section 3 of the meeting packet.

Mr. Forney then gave an update on the current economic market and his evaluation of Citizens’ $10 billion portfolio. Mr. Forney also has identified 10 AAA-rated money market funds in which to invest and diversify Citizens’ holdings. Citizens already has invested one-third of its portfolio in these funds.

Mr. Forney currently has a Request for Proposal out for money managers and will have recommendations for the Board of Governors at its next meeting.

An evaluation of Citizens’ investment guidelines was requested and a presentation will be made to the Board at its next meeting.

Ms. Binnun gave an update on Citizens’ claims paying ability. Total funds available to pay claims for 2008 are currently at $22.8 billion. This puts Citizens in a unique position in the world market due to its high liquidity.

Chairman Douglas proposed an amendment to Citizens’ investment contract that would increase Mr. Forney’s pay in light of the daily updates he is now providing. This motion was approved and will be sent to the Board.

Ms. Binnun then requested permission to interview Benfields and Guy Carpenter as reinsurance providers.

Concern was raised about having the same consultant doing reinsurance research and brokerage. This year, Citizens has spent considerable time researching potential reinsurance needs and knows exactly what it wants from a reinsurance program. Due diligence will be done by Citizens to make sure no conflicts of interest occur.

Should you have any questions or comments, please do not hesitate to contact this office.