Also, by competitive bids, an insurer or multiple insurers would service the policies and be responsible for claims adjustment after a hurricane occurred, the report said.

Private insurers would still sell homeowners coverage–excluding hurricane wind coverage–to wrap-around coverage sold by the privately-run state insurer.

“If writing only the hurricane wind portion of the coverage proves too narrow a spread, consideration should be given to using this approach to write the entire homeowners' insurance policy for all Floridians,” the report stated.

Sam Miller, executive director of the Florida Insurance Council, said that while his organization has taken no position on a state takeover of the hurricane business, the idea has been around for some time.

In general, he noted, the industry has said that the financing resources Florida has in place for hurricane losses at the moment would not generate sufficient funds to cover all Florida hurricane losses.

“Several insurers, during a workshop with House Democrats last month, said the concept might be a sound one, but many months of work would be necessary to determine if it actually would work,” Mr. Miller said.

A state commitment to charge actuarially sound rates would be a top prerequisite for a successful state-run plan, he added.

Joseph Annotti, senior vice president for the Property Casualty Insurers Association of America, said the AIR plan appears based on an “oversimplified 'government knows best' concept, one that has failed consumers around the world.”

“You only need to look at the performance of the state-run Citizens Property Insurance Corp. for an example of how well this idea might work,” added William Stander, assistant vice president and regional manager for PCI.

“Citizens is running at a $1.8 billion deficit, has had a number of operational and management problems, did not have adequate staffing to handle the claims volume, and logged by far the largest number of complaints from homeowners of any insurer,” he said.

“Instead of creating yet another state-run entity, what is required is an influx of capital with an appropriate long-term rate of return,” he added. “This, coupled with continued efforts to strengthen building codes, the adoption of prudent land-use policies and the encouragement of disaster mitigation, will allow policymakers to focus on finding the real solutions to problems in the state's insurance market.”