Cat Fund Right-Sizing Supporters Vow to Bring It Back
The key Senator and Representative who promoted the Florida Hurricane Catastrophe Fund (FHCF) right-sizing proposal expressed disappointment that the bills did not receive more attention in the recently concluded session. At least in the case of those who are eligible to return to the legislature next year, they vow to keep pushing for the reform.
The proposal would have gradually reduced the size of the FHCF and increased its cost over several years. However, the measure stalled when lawmakers realized it would increase the private market’s rates and increase the disparity between those rates and the rates in effect by the state-run, actuarially-deficient Citizens Property Insurance Corporation.
Representative Bill Hager called the legislature’s inaction “extremely disappointing,” and he dismissed the idea that other issues justifiably overshadowed this proposal. Representative Hager urges that in a hurricane-exposed state like Florida, bills that reduce the state’s potential exposure should be a priority. Representative Hager says he will bring the proposal back next year. His Senate counterpart J.D. Alexander, however, is term-limited and won’t be back. Another Senator will need to step to the forefront on this legislation, but there are several likely supporters.
Opponents of the proposal recognized that reducing FHCF coverage will result in more reinsurance being purchased in the private market, which ultimately would lead to increased rates for consumers. Politically speaking, there’s no good time for rate increases, but there is a bad time— an election year following several years of a down economy. Some insurers expressed reservations about the bills too, stating that if their rates go up more than those of Citizens Property Insurance Corporation, the residual market will continue to expand.