Fla.’s Citizens Bolsters Cash Position with Liquidity Program

April 6, 2007

  • April 6, 2007 at 1:38 am
    Joe Peters says:
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    Does any rating agency formally review Citizen\’s and its financials?

  • April 6, 2007 at 2:04 am
    FL agent says:
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    Citizen\’s is not formally rated by any agency, nor, to my knowledge, do they even submit the type of information usually required by folks like AM Best or Moody\’s. Their accounting methodology is also quite different than private carriers.

    Citizens does have a bond rating, but that is quite a different animal, and has a lot more to do with the way rating agences handle municipalities than insurers. In fact, continued crashing and burning by Citizens (artificially low rates causing continued deficits) will begin to negatively affect Florida\’s bond rating, increasing the cost of bonds for roadbuilding and other infrastructure projects.

    Think of Citizens as something closely akin to the Social Security trust fund at the federal level. Most of the money in Citizens\’ (and the FHCF) checking account is a fiction. Citizens\’ asset base is mostly IOUs in the form of bonds.

    If Citizens submitted financial information to AM Best, they would laugh them out of the building. If a private insurer tried to do business in Florida with Citizens-flavored financials, they\’d be run out of the state on a rail.

    Yet politicians tout this as the solution to all our problems. Any more help from Tallahassee, I\’ll be getting a little paper hat and a name tag.

  • April 9, 2007 at 9:36 am
    Tom says:
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    FL Agent- I have to agree with you 100%. It still baffles my mind that the State of Florida is in the insurance business and they solidified their position during special session by legitimizing Citizens. Of course the board has yet to meet concerning agent\’s commissions. You know all of us greedy agents are making money hand over fist. The commission rate is 10% however the hurricane premium and all other fees are non-commissionable, so effectively agents are compensated approx 6.7% to 6.9% over 50% less than the standard markets. Then of course the hysteria about Citizens is the amount of money being paid out to agents. There are approx. 45,000 policies a month being written by Citizens what would be the largest expense?
    So now the State of Florida is in the insurance business, they now have three assessable funds who is going to bail them out: Florida property owners and businessowners!!! Citizens is no longer the place of last resort. There better be good funding to pay claims if Florida is hit with the number and magnitude of storms like 2004-05, the assessments are going to be huge and of course the irresponsible journalists in Palm Beach Post will blame the greedy agents for the failure of Citizens.

  • April 9, 2007 at 10:48 am
    billeeee says:
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    Liquidity Program, yeah right. Call it what it is — the headline should read, \”Citizens Takes Out Billions in Loans While Legislature Forces Second Mortgage on All Florida Homeowners in Order to Pay Citizens\’ Loans Back\”

  • April 9, 2007 at 12:30 pm
    mark says:
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    HELLO Florida residents!!!!! Citizens is a disaster just waiting to happen and it will happen.

    Citizens is an entity set up by the government. When has state or federal government EVER done anything that was cost effective and provides even barely acceptable service?

    The big hurricane is coming to a major Florida city, get ready for no claim service,claim funding shortfalls and assessments to offset claim funding shortfalls.

    PS – Florida is a 90 mile wide island! When are you going to wake up and smell the roses?

  • April 13, 2007 at 9:44 am
    morcia says:
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    an alert to people is wake up and smell the coffee, not roses.



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