Citizens Board of Governors Meeting 1/20/2006
Dec 20, 2006
On January 19, 2006, the Board of Governors of Citizens Property Insurance Corporation met in Jacksonville, Florida for a regularly scheduled meeting. Chairman Bruce Douglas stated that Hurricane Wilma created the largest storm loss for Citizens with 135,000 claims. Of those 80% have been settled to date. Citizens will draw down $800 million of a 2.1 billion dollar bond to finance those claims. Citizens will receive Florida Hurricane Catastrophe Fund reimbursement and is expecting to receive approximately $100 million from surplus lines. Chairman Douglas indicated that the Board will wait until after the 2006 legislative session ends for further financing activity. Chairman Douglas further added that Citizens is on schedule to become the states largest insurer around April 15, 2006. They are currently processing 40,000 new policies a month with 6,900 agents. The largest private insurer has about 900 agents.
The Chairman announced a change in the staff organizational chart with former Corporate Counsel Susanne Murphy named Deputy Executive Director. Murphy will directly oversee the new in-house General Counsel which has not been named yet. In addition Murphy will oversee the Director of Corporate Admissions, JD Lester as well as Agent and Consumer Services. The Chief Information Officer is Curt Overpeck and the new Chief Financial Officer is Theresa Slack. Paul Palumbo is the Chief Underwriting Officer and Scott Wallace is the VP of Operations.
Executive Director Bob Ricker stated that the goal of Citizens is to reduce the total policy count by one half, however no time frame was announced. The Office of Insurance Regulation has approved a new bonus plan and a new no bonus plan. Homewise Insurance Company recently took 30,000 policies out of Citizens under the no bonus program. Director Ricker announced that he expects another high risk account take out company to be approved by OIR February or early March.
Public hearings have been scheduled to gather public input on the Citizens’ top twenty rate filing as well as the “actuarial sound” rate filing. There will be four hearings, two in Miami on February 1, and two in Clearwater, the first on February 2 and the second on February 3. Citizens has plans to implement the 16.3% top twenty filing in March of this year.
Two reports are due to the Legislature. The first is in regard to current Florida statute which states in part that Citizens must reduce their PML by 25% by year 2007. If that has not been accomplished, Citizens must take action to reduce the windpool territories. The 25% number is based on a November, 2000 PML of 4.3 billion, the current PML as of November 30, 2005 is $8.7 billion. There is currently legislation filed that would delete that section of statute. On February 1, 2006, a report is due to the Legislature giving an update on policy count, exposure, financing, etc. The Chairman indicated that he has read a preliminary draft of the Auditor General’s report and that they found no “smoking gun”.
The next scheduled Citizens Board of Governors meeting will be February 9, 2006 and is scheduled to be a conference call at this time. If you have any questions please feel free to contact Colodny Fass.