Florida’s Citizens Property Insurance Board Approves 2016 Risk Transfer Program
May 24, 2016
At its meeting this morning, May 24, 2016, Citizens Property Insurance Corporation’s (“Citizens”) Board of Governors approved a total 2016 risk transfer program of $2.464 billion for the state-run insurer, along with the purchase of the Florida Hurricane Catastrophe Fund (“FHCF”) mandatory layer.
Citizens will transfer $443.3 million of 2014 and 2015 multi-year traditional reinsurance to be utilized both alongside and above the FHCF coverage (Layer 1). The one-year risk transfer contract is for $221 million excess of $517 million of commercial non-residential losses through traditional markets for Layer 2.
Citizens is required by law to purchase the mandatory layer of coverage offered by the FHCF. This coverage layer provides risk-transfer at rates below rates offered in the private market. Mandatory FHCF coverage is estimated at approximately $2.7 billion, at 90 percent of covered losses after retention. FHCF reinsurance is only available for residential coverages, not commercial non-residential policies.
The meeting documents are provided below via hyperlink:
02A Executive Summary 2016 Reinsurance Program
02B 2016 Proposed Risk Transfer Program Layer Charts
02C Action Item – 2016 Traditional Risk Transfer (Coastal Account)
02D Action Item – 2016 Florida Hurricane Catastrophe Fund Risk Transfer
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