Citizens: in “best financial position” ever

State-backed property insurer Citizens Property Insurance Corp. told the governor and Cabinet Tuesday that it’s flush with cash and other assets. The company said it can weather a 25-year storm, and it wouldn’t have to levy assessments on all insurance-owning Floridians unless a $14 billion storm hit the state.

Responding to a query from Agriculture Commissioner Charlie Bronson, Sharon Binnum, Citizens’ chief financial officer, said market improvements and uneventful hurricane seasons mean the state’s largest property insurer is well-positioned to handle all but the most catastrophic storms through the upcoming hurricane season that begins June. 1.

“Citizens is in the best financial position it has ever been,” Binnum told Cabinet members. Minimal storms could be handled without imposing surcharges or assessments; more catastrophic storms, in turn, could be handled with emergency assessments and not additional long-term debt.

Citizens now enjoys a $3.9 billion surplus in its premium-to-obligations, and has $11 billion in cash and investments. The insurer recently obtained $2.3 billion in pre-season hurricane financing. Citizens now insures $405 billion in property value, or about 23 percent of the residential market.

“If we don’t have Citizens, I don’t know how our economy could continue,” said Belinda Miller, state deputy insurance commissioner.

Insurance policyholders have already paid more than $5 billion in assessments to pay for damage caused by hurricanes in the 2004 and 2005 hurricane seasons.

Sam Miller, vice president of the Florida Insurance Council, said the situation was not all rosy. The agency would still fall short in the event of a 50- or 100-year storm. “They acknowledged that in the event of a severe hurricane, the federal government will have to step in,” Miller said.

One reason things are improving for Citizens, Miller said, is because lawmakers ended a cap last year that kept Citizens’ premiums frozen for several years following the busy ‘04-‘05 seasons when many residents’ rates increased drastically.

Source: News Service of Florida, Michael Peltier