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Letter to the editor

Citizens' state investment pool share climbs

By TOM ZUCCO, Times Staff Writer
Published December 7, 2007

Citizens Property Insurance suddenly has about $500-million in the wrong place: the state's ever-shrinking Local Government Investment Pool.

And that may have to change at some point, Citizens board chairman Bruce Douglas said Thursday.

The state-backed insurer may have to withdraw some of the money it invested in the pool because of a guideline that requires that Citizens' assets not make up more than 10 percent of the fund. It currently makes up 14 percent.

The reason it's at 14 percent? A recent run on the fund.

The largest investor in the pool, Citizens has not withdrawn any of the $7-billion it has invested with the state. Much of that money - about $5-billion - is in much safer investments not affected by withdrawals.

But others have made substantial withdrawals from the local government fund - more than $11-billion so far - which leaves Citizens with a growing share of what's left.

Douglas said Citizens, the largest property insurer in the state with 1.4-million policyholders, will work with fund managers to find the best options should Citizens need to access its money.

"The luxury we have is that right now, we don't need the money as desperately as city and county governments do," said Citizens spokesman Rocky Scott. "We can sit and wait until we get this worked out."

In the meantime, Douglas asked that Citizens take a hard look at all of its state-run investments.

"So that we have a comfort level," he said, "as far as our total $7-billion."

Tom Zucco can be reached at zucco@sptimes.com or (727) 893-8247.

[Last modified December 6, 2007, 22:46:12]