Citizens Property Insurance Corp.’s board of governors approved two proposals that will boost the amount of cash available to pay hurricane damage claims this year to $8.8 billion.
“I want to make certain everyone understands this and puts it in proper perspective,” said board Chairman Bruce Douglas after the board agreed to establish lines of credit and capital market financings to boost Citizens liquidity resources by $1.2 billion.
“In the 2004-05 storms seasons, we paid a total of $5.1 billion in claims,” Douglas said, “and now we will have more than $8.8 billion available to pay claims for the 2007 hurricane season.”
The $8.8 billion is a combination of cash surplus, lines of credit, and pre-event financings that provide Citizens with access to liquidity to pay claims.
Douglas said the additional claims-paying resources approved by the board of governors was specific to the Personal Lines Account and the Commercial Lines Account
He said although the resources increase the funds available to pay claims in the event of a hurricane, they do not guarantee Citizens will not need to assess in 2007.
“All three of our accounts are in good shape from a claims-paying resource standpoint,” Douglas said.
Source: Citizens Property Insurance Corp.
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