The Palm Beach Post is reporting that state-run insurer Citizens’ board chairman has been twice to Bermuda and once to London as approval was given for the purchase of private reinsurance costing up to $300 million in 2014.

Chairman Chris Gardner showed a “personal commitment” to the process, Citizens president Barry Gilway said.

Politicians in the state have held a years-long debate in regard to engaging with the reinsurance industry. Citizens is under the microscope in regard to its ability to withstand a major catastrophic event, while opposing political figures are unconvinced of the value of private reinsurance to the customer, and argue it would mean the money spent would be lost to the state insurer.

A report by the governor’s inspector general last year criticised Citizens for weak controls on travel and other spending such as $600 per night hotels in Bermuda.

Now, The Palm Beach Post has reported that Citizens officials have “praised each other” for foreign travel, including to Bermuda.

The newspaper stated that the backup coverage purchased from offshore companies would help pay claims after an extremely rare and powerful storm such as a 1-in-100 year event, which is worse than anything modern Florida has encountered. That has helped reduce the potential assessments to Citizens customers and others in that unusual circumstance from nearly $12 billion a couple of years ago to less than $3 billion, Mr Gardner said.

“We’ve done great things today,” Mr Gardner was quoted as saying.

Home-owners in Florida are opting for private insurance in increasing numbers, with the company’s customer count falling from 1.5 million to a little more than 900,000. The newspaper said: “The company has about 100,000 customers in Palm Beach County, down from nearly 150,000.”

It was reported that Citizens spent $304 million on private reinsurance last year. The newspaper reported: “Citizens, which has a $7 billion surplus available to pay claims and also gets low-cost backup coverage from a state catastrophe fund, spent nothing on private reinsurance as recently as four years ago. The private coverage would lower the risk of assessments after storms far worse than, for example, the hurricanes of 2004 and 2005, which would trigger no assessments. If no rare storms hit, the money stays into the coffers of private reinsurers and cannot be added to the Citizens surplus.

“Much of the coverage has less than a three percent chance of being used in a given year.”

The Palm Beach Post said they reported last year if the worst storm in recent Florida history were to return — 1992’s Hurricane Andrew — Citizens customers would be assessed $8 on a $2,000 policy while customers of other insurers would pay nothing.