Florida officials try to Boost Hurricane Fund

 

Thursday, Apr 16,2009, 1:11:08 PM   Click:

April 15 - Tallahassee - The outlook for state funding to support the market for property insurance improved after a hurricane Tuesday, with the thaw in credit markets and a House committee to approve a measure falls within the fund certain responsibilities.

Officials in charge of the Florida Hurricane Catastrophe Fund, or CAT Fund, "said Governor Charlie Crist of Florida and the Cabinet, they now believe that the state could sell up to $ 8 billion of obligations for cover losses if a catastrophic storm, a substantial increase over the $ 3 billion financial advisers had predicted.

The change, it is more likely that residents whose insurance companies depends on the state funds will have their claims paid if a major storm. It also helps state officials as funds scramble to ensure viability and prevent the possibility that insurance companies will be downgraded by rating agencies, which could make it more difficult to obtain a mortgage .

Although this does not solve all planned $ 18.4 billion gap between the obligations of the fund of the state and its ability to pay during the fiscal year that begins July 1, it could relieve pressure of the fund would face in stormy weather.

The CAT fund is a reinsurance program, which means that sells coverage to private insurers who then sell coverage to consumers.

But Chief Financial Officer Alex Sink, speaking after the Cabinet meeting, said even with the capacity to link higher, the state remains a need to reduce about $ 11.1 billion in collateral that sells the optional funds for insurers.


"We need to get the company to make the top layer down as soon as we can," said Sink, a Democrat.

A few hours after she spoke, the House of the policy of the Government approved a measure that would eliminate the option of coverage of more than six years. The measure has wide support on Capitol Hill.

By law, the premiums of the State supported by the Insurance Corporation property of citizens will increase until they are in line with what is necessary to make the company solvent. The plan should also funnel $ 26 million of the new bonus money to finance my Safe Florida Home, a program that helps homeowners who seek to strengthen their houses against damage due to storms.

The committee also approved a measure that the regulators clip the wings of the Office of Insurance Regulation. The proposal, by Rep. Bill Proctor, R-St. Augustin, to allow insurers to sell residential property insurance policies nonassessable, whose price could not be maintained by OIR.

These policies can not be charged to help pay for the losses suffered by citizens in a storm.

Proponents say the measure would allow Floridians to get more reliable if it is more expensive than coverage has fled Florida in recent years. More recently, State Farm Florida announced it would exit the market of insurance of goods during a period of two years after the Insurance Commissioner Kevin McCarty has rejected the company's request for an increase rates that have averaged 47 percent of the state.

"This legislation gives consumers another choice," said John Hall, director of the state of small government group FreedomWorks, and protects the hidden tax of a hurricane. "

brandon.larrabee @ jacksonville. com, (678) 977-3709