R Street congratulates Florida Cabinet for approving transfer of Cat Fund risk
TALLAHASSEE (April 14, 2015) – The R Street Institute praised today’s Florida Cabinet decision to allow the Florida Hurricane Catastrophe Fund to purchase $1 billion of retrocessional coverage.
The decision follows from the cabinet’s previous approval for the Cat Fund to pursue up to $2.2 billion of protection. The remaining $1.2 billion will be secured through pre-event bonds.
“The Cat Fund poses huge liabilities on Florida’s taxpayers due to the hurricane exposure it is legally required to cover,” said Christian Camara, R Street’s Florida state director. “Today’s responsible action by Gov. Rick Scott, Attorney General Pam Bondi and Chief Financial Officer Jeff Atwater will shield Floridians from potentially billions of dollars in debt and post-hurricane taxes, should a long-overdue hurricane strike the state this year.”
Securing the total $2.2 billion of additional protection will enable the Cat Fund to reach its $17 billion statutory maximum obligation to reimburse participating property insurers.
Camara praised state and Cat Fund officials for securing the funding in the private market through no extra cost to existing policyholders
“The fact that the Cat Fund is able to secure the extra protection without increasing insurance rates on consumers is another sign that hurricane risk management in the state is headed in the right direction,” he said.
