Florida Gov. Rick Scott and members of his cabinet voted last week to add $2.2 billion of coverage to the state's catastrophic insurance fund, according to The Tampa Bay Times. The decision was made in anticipation of what is being predicted to be another quiet hurricane season for Florida.
The vote approved a two-part transaction in which the state will buy $1 billion in reinsurance, transferring that risk to the private insurance market, reports The Tampa Bay Times. Another $1.2 billion in coverage will be secured from the issuance of bonds. The deal will allow the Florida Cat Fund to reach its state-mandated ceiling of $7 billion to cover all storm claims in a single season.
According to The Tampa Bay Times, Florida hopes spreading some of its future risk will help the fund avoid having to hit policyholders with higher assessments if a hurricane impacts the state. A hurricane has not made landfall in Florida since 2005.
Florida policyholders -- including Citizens Property Insurance Corp. customers -- will see "minimal" premium increases of two-thirds of 1%, or $13.75 per year, according to state financial experts. Florida Insurance Commissioner Kevin McCarty says he does not believe the transaction will result in higher rates, says The Tampa Bay Times.
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
