FWCJUA Investment Committee Meeting Report: March 26
Mar 26, 2009
The Florida Workers’ Compensation Joint Underwriters Association (“FWCJUA”) Investment Committee (“Committee”) met via teleconference on March 26, 2009.
Compliance Review of the Current Investment Portfolio
Since the Committee’s most recent meeting on February 27, 2009, the CitiGroup, Inc. bond held by the FWCJUA portfolio has been downgraded by Moody’s from an A3 to a BAA1.
The Committee discussed whether to reconfirm continued holding of the newly-downgraded CitiGroup, Inc. bond as an exception to the Investment Policy, or sell it for a loss.
FWCJUA Executive Director Laura Torrence reiterated the FWCJUA Investment Policy’s exception clause, which states that it may be necessary to deviate from the Policy due to increased or decreased liquidity needs, or to take advantage of a particular situation or investment. Exceptions to the Policy approved by the Committee must then be presented to the FWCJUA Board of Governors (“Board”) at its next meeting.
The Committee passed a motion to reconfirm the Citigroup holding as an exception to the Investment Policy.
Ms. Torrence said the status of the FWCJUA’s remaining bonds, which include Lehman Brothers, Home Depot, Anheuser Busch and Vulcan Materials, was unchanged, and recommended continuing to hold them. The Committee passed a motion to reconfirm the continued holding of those bonds.
Review of Policy and Guidelines for the Investment of Assets and Associated Matters
On March 17, 2009, the Federal Deposit Insurance Corporation (“FDIC”) extended the Temporary Liquidity Guarantee Program (“TLGP”) from June 2012 to December 2012. Since the FWCJUA Investment Policy references the TLGP expiration date, Staff is recommending a proposed revision to the Investment Policy that would update the expiration date of the program accordingly.
In discussion on whether to adopt this proposed change, Committee members decided to recommend the Policy revision to the Board, but alter the terminology from the specific expiration date of December 2012 to “until the expiration of the TLGP.”
A motion to recommend the Policy revision was passed.
The Committee briefly discussed its current monthly meeting schedule. A Committee member observed that, as the economic outlook appears to be stabilizing, the Committee should discuss reducing the meeting schedule to once every other month at a subsequent meeting. Committee members concurred with this suggestion.
The next Committee meeting will be via teleconference on Friday, April 24, 2009, at 10:00 A.M.
With all business concluded, the Committee adjourned.
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