Florida Insurance Guaranty Association Finance and Audit Committee Meeting Report: July 25, 2011

The Florida Insurance Guaranty Association (“FIGA”) Finance and Audit Committee (“Committee”) met today, July 25, 2011, to review the organization’s April 1, 2011 through June 30, 2011 investment report. 

With a quorum of members in attendance, the meeting was called to order by Chairman John Watson. 

After approving the Committee’s March 31, 2011 meeting minutes, the Committee reviewed FIGA’s total investment portfolio, which, as of June 30, 2011, is worth just under $185 million.  Approximately half of the portfolio is managed by Cutwater Asset Management (“Cutwater”) and the other half is handled by RBC Asset Management (“RBC”).  A small portion of the portfolio comprises FIGA’s operating account. 

Both Cutwater’s and RBC’s portion of the portfolio saw a return of .32 percent on a 12-month average.  Although most of FIGA’s investments have a shorter-than-normal maturity, they are still diversified among many sectors.  Both Cutwater and RBC recommended that the Committee should look at additional investment benchmarks in the future. 

It was reported that, in light of the financial situation, if any of the bonds held in FIGA’s portfolio were to be downgraded, this could put FIGA’s investments out of compliance.  Should this happen, the Committee has asked that both Cutwater and RBC develop a course of action and recommend changes should the Committee need to revisit their short term investment policy, due to the downgraded rating. 

Following the investment report, the Committee members expressed their satisfaction with the presentation and portfolio. 

With no further business before the Committee, the meeting was adjourned. 

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