Fla. Senate delays vote on wind insurance measure
The Associated Press
A Senate committee searching Wednesday for ways to improve Florida’s shaky property insurance situation and lower the state’s risk recommended borrowing money from the state retirement system to obtain some short-term relief.
The proposal debated in the Senate Banking and Insurance Committee would also permit the state-backed Citizens Property Insurance Corp. to increase rates by as much as 10 percent for several years to reach actuarial sound levels.
Without the staggered rates, some Citizens customers could be looking at premiums jumping 40 percent to 50 percent.
But the panel postponed a vote on its bill (SB 1950) designed to reduce the state’s $28 billion exposure in the Florida Hurricane Catastrophic Fund, often called the Cat fund.
"Right now we don’t have the ability to pay claims if a major hurricane were to come through Florida," said Sen. Garrett Richter, R-Naples, who chaired the committee. "Doing nothing is not an option."
But with the start of the 2009 hurricane season just two months away, nothing was done Wednesday.
"If we get a hurricane three months from now, we’re stuck," Richter said. "We’re gonna have to go to Washington with our hat in our hand."
One short-term consideration was to borrow from the state’s pension fund instead of dealing with outside investors, in effect repaying itself. Last summer Warren Buffett’s Berkshire Hathaway pocketed $224 million for a one-time $4 billion guarantee that wasn’t needed.
"We managed to get ourselves, as a state, into the insurance business," Richter said. "This bill is trying to get us out of the insurance business."