St. Petersburg Times
Special report
Video report
  • For their own good
    Fifty years ago, they were screwed-up kids sent to the Florida School for Boys to be straightened out. But now they are screwed-up men, scarred by the whippings they endured. Read the story and see a video and portrait gallery.
  • More video reports
Multimedia report
Print Email this storyEmail story Comment Letter to the editor
Fill out this form to email this article to a friend
Your name Your email
Friend's name Friend's email
Your message
 

Citizens' fund risk significant

But the state insurer's cash flow is ample - at least until the next hurricane season.

By JENNIFER LIBERTO and TOM ZUCCO, Times Staff Writers
Published December 6, 2007


ADVERTISEMENT

A big topic of conversation at today's Citizens Property Insurance Corp. board meeting in Gainesville will be risk.

Not risk from hurricanes, but from troubled securities tied to the subprime mortgage meltdown - the same securities that triggered a $10-billion run on a major local government fund managed by the state, causing the state to close it down last week.

Not only is Citizens the single largest investor in the troubled fund, it also is exposed to troubled securities in another fund managed by the State Board of Administration.

As much as 11 percent of Citizens' assets - or more than $560-million - are exposed to securities that have defaulted, missed interest payments or have been downgraded.

As a comparison, about 6 percent of the total assets in the local government fund that was frozen by the state are in similarly troubled securities.

Citizens, the state-run company that provides property insurance for those who cannot find it on the open market, has morphed to currently insure one in four Florida homes.

Citizens has about $10.2-billion in cash and investments. It will likely have no need to tap into funds managed by the state's Board of Administration, at least until the next hurricane season starts in June. That gives Citizens and SBA officials plenty of time to juggle the bad securities or wait for them to start paying off.

In addition, Citizens has a monthly net operating cash flow of about $200-million, beyond what it needs to pay routine operating expenses and debt.

"Citizens has ample liquidity from both operations and investment sources to meet its routine cash flow needs for operating expenses and debt service," the company said Tuesday.

[Last modified December 5, 2007, 22:17:42]


Share your thoughts on this story

[an error occurred while processing this directive]
Subscribe to the Times
Click here for daily delivery
of the St. Petersburg Times.

Email Newsletters

ADVERTISEMENT