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Board Debates Shoring up Citizens

Citizens Property Insurance Corp. is debating whether to purchase private reinsurance this year to help shore up its financial footing. Also, some bills pending in the 2011 legislative session could mean big changes at Floridas largest property insurer.

Citizens Property Insurance Corp., confronted with dire projections that a massive hurricane could inflict $22 billion worth of damage on the insurer, may try to shore up its finances ahead of what could be a very active storm season. It is debating whether to purchase private reinsurance this year; it has traditionally only relied on the Florida Hurricane Catastrophe Fund (Cat Fund).

Citizens Board of Governors Chairman Jim Malone and high-ranking officials from the insurer visited Bermuda in March where they spent an entire day meeting with representatives of the world’s major reinsurance firms, many of which are based in the tiny island nation.

Malone said the logic behind the trip was simple. He wants Citizens to be more engaged at looking at the private markets to help ensure that it has other sources of capital to pay out claims after a storm.

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