In Advance of Exposure Reduction Negotiations, Citizens Property Insurance CEO Gilway Seeks To Dispel Potential Foreign Travel Expense Concerns
Feb 13, 2014
In an effort to pre-empt concerns about foreign travel expenditures during negotiations involving traditional reinsurers and capital market private risk transfer, Florida’s Citizens Property Insurance Corporation President and CEO Barry Gilway explained the reasons for the overseas meetings in a January 30, 2014 letter to Citizens’ Board of Governors.
“Under (Internal Revenue Service) rules, if a reinsurer is domiciled outside the United States, it cannot come to the U.S. to discuss business with clients without incurring tax and legal consequences. Thus, (reinsurers) can’t come to us. If we are going to educate the reinsurers in person, we have to go to them,” Mr. Gilway wrote, citing bottom line savings that resulted from last year’s face-to-face visits with reinsurers.
Headed by Mr. Gilway, a team of Citizens executives met with several reinsurers in Bermuda during January. A smaller contingent will travel to London during late February for additional negotiations.
“Rest assured we are not traveling to these places for fun,” he added. “We are traveling to take billions of dollars in potential losses off the backs of our policyholders and the people of the state.”
In his letter, Mr. Gilway also clarifies the difference between traditional reinsurance and capital market risk transfer.
To read the entire letter, click here.
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