FHCF Assessment to End Early
The assessment imposed by the Florida Hurricane Catastrophe Fund (FHCF) will end 18 months earlier than previously projected. Governor Scott and the Cabinet voted to terminate the assessment as of January 1, 2015 rather than the scheduled July 1, 2016, end date.
The assessment currently is 1.3% of premiums. Insurers add the assessment amount to policies, collecting those amounts from policyholders and remitting the funds to the FHCF. According to the FHCF’s Jack Nicholson, the FHCF is able to eliminate the assessment earlier than projected in part because final settlements from Hurricane Wilma have come in almost $500 million less than anticipated. Growth in the number of policies in force statewide or overall premium levels also serve to bring money into the FHCF earlier than planned.
Although the FHCF provides reimbursements only in the residential property insurance lines, the FHCF’s assessments apply more broadly to most property and casualty lines of insurance. Insurers in the affected lines of insurance will need to begin planning to terminate this assessment at the close of this year.