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Citizens Property Insurance approves independent review of loan program

4:42 PM, Oct 19, 2012   |    comments
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Tallahassee, Florida - Citizens Property Insurance Corporation will have financial services company Goldman Sachs review the terms of a loan program for private insurers.

The state-operated insurer wants to offer $350 million in low-interest loans as an incentive for private insurers to take over policies from Citizens.

But the idea is controversial. State lawmakers say they want to take a closer look before allowing the plan to move forward.

So Citizens is putting on the brakes and hiring Goldman Sachs to examine the proposal.

"We don't want anyone to think this program has been rushed and I think the most important thing I can say is, we are looking to build consensus and make everyone comfortable .. that we've dotted the 'i's' and crossed the 't's' and nothing about today is intended to make anyone think that we're rushing this through without real consideration," said Christine Ashburn of Citizens Property Insurance Corp.

The cost of the contract with Goldman Sachs cannot exceed $200,000.

Citizens' Board of Governors is also looking to hire a second financial firm to review the loan program.

Ashburn says Citizens wants the program in place by the start of next hurricane season in June but that would likely mean settling the terms by early next year.

"There probably is really a February cutoff before this program would have to be put on hold until after next hurricane season. So that's one of the reasons we've done this with the timing schedule that we have."

Citizens hopes the third-party reviews are done before the end of the year.

The company has grown to become Florida's largest property insurer with about 1.4 million policies and now it's looking to shed customers and  reduce its risk.

  

Dave Heller

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