Florida’s “insurer of last resort” says it has finalized its financial preparations for the 2015 hurricane season and has enough money to pay claims on a once-a-century storm without levying assessments on Florida policyholders.
Last week, Citizens Property Insurance Corp. closed a $1 billion bond transaction to supplement an earlier purchase of $1.9 billion in reinsurance, $2 billion in capital transfer and $7.5 billion in surplus.
By contrast, Florida residents faced a potential $11.6 billion assessment if a 1-in-100 year storm hit four years ago.
State law allows Citzens to levy special assessments on its policyholders and customers of private insurance companies, including auto insurers, if it cannot pay claims after a catastrophe.
Citizens says it enters this year’s storm season in its strongest financial position since it was created in 2002. Since October 2012, the state’s policy of encouraging private insurers to “take out” Citizens policies has reduced Citizens’ policy count from nearly 1.5 million to 590,000.