Citizens Finance & Investment Committee: June 27 Meeting Recap

The Finance and Investment Committee (“Committee”) of Citizens Property Insurance Corporation (“Citizens”) met on June 27, 2007 to discuss general issues of the Committee.  The agenda is attached for your review.

The highlights of the meeting are as follows:

 

Investment and Custody of Certain Operating Assets

A motion that the Board approve the following passed unanimously:

• Authorize the diversification of the operating asset portfolio by funding two additional investment portfolios benchmarked to the 30-day LIBOR, with an initial balance for each manager of $250 million.
• Authorize staff to take all necessary action to amend the current Investment Management Agreements with the recommended external investment managers to allow for a reduced investment management fee of five basis points.
• Appoint Mellon Bank to serve as Custodian for all operating assets and authorize the appropriate staff members to take all necessary action to negotiate and execute a contract with Mellon Bank to perform these services.

 

Investment of Residual Bond Proceeds

The Board previously voted to have the State Board of Administration (“SBA”) act as investment manager for Citizens’ 2004, 2006 and 2007 bond proceeds.  A motion was made that the Board approve a technical amendment to add, “all residual bond proceeds and other assets that fall under direction of the HRA 1997 Trust Indenture or the PLA/CLA Master Trust Indenture,” also be managed by the SBA.  The motion passed.

 

Investment Reports

A complete restructuring of Citizens’ investment portfolio is underway, having begun about 1 ½ years ago.  The reformation is divided into three (3) parts:

• Investments

• The Committee is very optimistic with respect to Citizens’ investments.
• The 1997 Funds will be retired this summer.
• As Citizens moves more money to the SBA, those funds will be benchmarked to the 30-day LIBOR, which makes better financial sense. 

• Bond issue

• The Office of Insurance Regulation’s appeal period expired and there were no appeals

• Bank lines of credit

• All lines of credit are scheduled to close on July 3, 2007.

Should you have any questions or comments regarding the above, please feel free to contact this office.