Bogdanoff compared the plan to the national flood insurance program and noted carriers would still write coverage for windstorm events that are not hurricanes. She acknowledged that her legislation is a fundamental reshuffling of property insurance, but said something has to be done.

"It's a major concept, it's a huge lift," said Bogdanoff. "But when you look at what could happen this summer if we were to have a Class 3 major hurricane go through the Tampa Bay area, a $75 billion loss, we will bankrupt the state of Florida. We will have to call 1-800 White House to bail us out."

The potential of a huge storm hitting the state has focused attention on the battered financial state of the Cat Fund. Despite having nearly $8 billion in the bank, the Cat Fund would be unlikely to come up with the additional $18 billion it would need to cover claims associated with a major hurricane like Katrina or Andrew.

Financial advisors are scrambling to find potential backup for the state-created reinsurance fund, but Gov. Charlie Crist and other state leaders are focusing much of their attention on trying to secure a line of credit from the federal government. Crist has asked U.S. Treasury Secretary Timothy Geithner to promise to buy bonds from Florida that would be paid back with Cat Fund assessments on insurance policies.

Cat Fund Worries

Chief Financial Officer Alex Sink said the federal government remains the only place to get such major financing in the wake of the ongoing credit crunch. "There is no single silver bullet here," she said. "There is no private market out there that has a lot of cash lying around right now. The only place that has liquidity, which means cash, is the federal government."

That does not mean that lawmakers won't be forced to act by the end of session.

"I think we need to be prepared to respond to the challenges of the Cat Fund this session if arrangements have not been adequate," said Sen. Garrett Richter (R-Naples), chairman of the Senate Banking and Insurance Committee. "If we don't have a sounder position on April 28, we better be prepared to develop one."

Sink has sent her own recommendations on the Cat Fund and insurance to Richter and Rep. Pat Patterson (R-DeLand), chairman of the House Insurance, Business and Financial Affairs Committee. She urged state lawmakers to go ahead with "common sense and gradual reforms" but ones that would not subject Floridians to "large, one-time premium shocks."

"If we take these smart, incremental steps, we will reduce our risk and make our state better protected and less financially exposed when a major storm hits," Sink wrote.

Sink called on lawmakers to spend $20 million in the coming year on the My Safe Florida Home program that provides grants to harden homes against storms. She also wants them to gradually reduce the size of Cat Fund coverage, give the Cabinet the ability to set Cat Fund coverage levels in the fall, and "gradually return" Citizens to an "insurer of last resort."

Workers' Compensation Fix

Richter and other Republicans say they are also determined to pass a workers' compensation bill this session, but it is not clear they will succeed.

The House Insurance, Business and Financial Affairs Committee moved HB 903 out of committee by a 19-2 vote during the second week of session, although neither the business coalition nor the trial attorneys are pleased with the measure.

The bill, from Rep. Anitere Flores (R-Miami), is meant to overturn an October Florida Supreme Court ruling in the Murray v. Mariner Health case. In its decision, the Court sided with Murray's workers' compensation claimant attorney, ruling that he was entitled to $16,000 in fees instead of a dramatically lower amount based on calculations set forth in the 2003 reform legislation. Insurance Commissioner Kevin McCarty signed off on a 6.4 percent workers' compensation rate hike in the wake of the ruling. However, if the fix passes, the rate hike likely will be reconsidered.

The House bill strikes a provision in the workers' compensation statute that maintains attorneys' fees must be "reasonable," a term the Court cited in its ruling. The bill also keeps intact statutory caps the Legislature placed on plaintiff attorneys' fees: 20 percent of the first $5,000 in benefits secured; 15 percent of the next $5,000 in benefits; 10 percent remaining amount of the benefits secured to be provided during the first 10 years after the date the claim is filed; and 5 percent of the benefits secured after 10 years.

Flores told committee members that the legislation is still being worked on by the affected parties — insurance carriers, workers' compensation attorneys and business group lobbyists — and that the disparate groups are meeting in hopes of reaching an accord.

"We are working toward a compromise," Flores said. "We are close; we are not there yet."

Both Richter and Flores say passage of the legislation is crucial in order to preserve jobs during the state's severe economic downturn.

"When it comes down to it, this bill is about jobs," Flores said. "If workers' comp rates go up — and they will — employers will have less money to hire employees. They will have to let workers go. We have heard that from employers; we have seen it. We know that it is a fact."

But Flores' bill is already drawing fire. Workers' compensation attorney Rosemary Eure said the fee caps and other procedural changes made in 2003 have had a "tremendous impact" on her Sarasota-based firm. With the fee caps, Eure reported that she has had to turn injured workers away, which she said means they are not receiving the care they need to return to work.

"Insurance companies and the self-insured [funds] are wrongfully denying benefits to the workers of this state, and that needs to stop," said Eure. "And we need you to assist with that."

Richter has a Senate companion bill similar to the measure sponsored by Flores. But while his bill is guaranteed passage out of his own committee, it is not clear how the measure will fare in the full Senate.