The Florida Hurricane Catastrophe Fund should have $17 billion available for this Atlantic hurricane season thanks to a lack of hurricanes hitting the state in the past 10 years, reports the Florida Times-Union.
"The money is there and it's in our pocket," Jack Nicholson, CEO of the Cat Fund, told the Florida Times-Union.
Twice a year Florida relies on Wall Street firms and financial advisers to calculate how much money the fund needs, and how much it could borrow in the event of a catastrophic storm. Early estimates showed the fund could meet its maximum claims without having to borrow any additional money, says the Florida Times-Union. Florida officials disagree.
Last month Gov. Rick Scott and three elected members of the Cabinet approved the purchase of $1 billion of reinsurance for the Cat Fund. Critics have opposed the plan, calling it "wasteful" and saying it could drive up homeowner rates.
"We do not need to buy that reinsurance," Rep. Frank Artiles, a Miami Republican and insurance public adjuster, told the Florida Times-Union. "You have more than enough money to survive a Hurricane Andrew [type] hit."
Florida created the Fund after the onslaught of Hurricane Andrew in 1992 to help keep private insurers from leaving the state. The Fund offers insurance companies backup coverage at prices lower than those in the private market.
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