Florida’s largest property insurer is preparing to transfer $3.1 billion in risk through a combination of reinsurance catastrophe bonds, including a $1.5 billion deal that is the largest of its kind on record.

The Citizens Property Insurance Corp. board of governors last week approved the plan that officials say will protect taxpayers from paying large assessments in the event of a hurricane.

In the 2014 storm season, if Citizens suffers the effects of a one-in-100 year storm, policyholders would face assessments totaling $2.4 billion. In the event of up to a one-in-70 year storm, Citizens would have enough funds to pay all claims without needing assessments.

That represents a significant decrease from the $11.9 billion assessment burden calculated in 2012.

The insurer is benefiting from a reduction in reinsurance costs and a growing interest by investors in catastrophic bonds.

“We’ve been able to capitalize on favorable market conditions across the board to maximize our 2014 risk transfer program,” said Chief Financial Officer Jennifer Montero. “Such market conditions have allowed us to exceed our initial expectations in regard to the level of reinsurance coverage at the most efficient pricing.”

Citizens is planning to transfer $1.5 billion in risk through the Bermuda-based Everglades Re Ltd., a company set up to solely serve as a conduit to issue Citizens bonds. The $1.5 billion comes on top of the $250 billion in bonds issued in 2013.

Unlike the 2013 catastrophic bond deal, the 2014 deal will be on an aggregate basis over the next three years, providing Citizens with coverage in the event of multiple smaller storms.

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