Fitch Affirms Debt Ratings for Citizens Property Insurance Corp.

January 23, 2004

Fitch Ratings has affirmed the ‘A’ long-term issuer and senior debt ratings of Citizens Property Insurance Corporation (Citizens).

This includes the ‘A’ rating assigned to the high-risk account senior secured pre-event note issue (Series 1997A). Fitch has also affirmed the ‘AAA’ rating of Citizens’ high-risk account senior secured pre-event note issue (Series 1999A) that is insured by MBIA Insurance Corporation with an unconditional guarantee of principal and interest. The Rating Outlook is Stable.

Fitch also expects to assign an ‘A’ senior debt rating to Citizens’ approximately $1.5 billion high-risk account senior secured pre-event bonds, Series 2004 (Auction Rate Securities) that the company plans to issue in the first quarter of 2004. Assignment of this rating assumes no material change in terms and conditions before issuance. This additional debt is being issued to satisfy Citizens’ board mandated requirement that sufficient claims paying resources be maintained to support a 1 in 100 year storm season loss, the estimate of which has increased to $7.0 billion currently, from $6.3 billion in January 2003.

The strong rating reflects Citizens’ sufficient high-risk account claims paying resources, state authorized power to assess its participating insurers as a pass-through vehicle to property insurance policyholders and surplus lines insurers in Florida following a large storm event, the high credit quality of that participating company base, and conservative and liquid investment portfolio. Weighted against these positives are the nature of exposure to windstorm catastrophes, a high level of reinsurance exposure in the Florida Hurricane Catastrophe Fund (rated ‘A+’ by Fitch), and a relatively small, but growing, amount of surplus.

Citizens is a not-for-profit, tax-exempt entity that provides full wind, hurricane and hail coverage to residential and commercial properties in Florida that are unable to obtain insurance in the voluntary, or standard, insurance market.

Citizens was created on May 10, 2002 when Florida Gov. Jeb Bush signed into law a bill that combined the Florida Windstorm Underwriting Association (FWUA) and the Florida Residential Property and Casualty Joint Underwriting Association (JUA) into a single entity.

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