The Florida Insurance Council has sounded a warning to statelawmakers about the Florida Hurricane Catastrophe Fund's conditionafter officials said it would be unable to pay all losses if acatastrophic storm hit.

At a meeting last week the FHCF advisory board acknowledged thefund's reimbursement capacity would come up short by between $10billion and $15 billion in the event of a maximum loss year.

The fund in an effort to avoid such a possibility has made anarrangement with Warren Buffett's Berkshire Hathaway in which thefund paid for a guarantee that Berkshire would buy $4 billion inbonds if the fund's losses exceeded $25 billion.

FHCF was created to protect and advance the state's interest inmaintaining insurance capacity in Florida by providingreimbursements to insurers for a portion of their catastrophichurricane losses.

FHCF Chief Operating Officer Jack Nicholson expressed confidencethat any near-term expenses can be paid.

"Our current cash resources can take us a long way," he said atthe meeting. "The fund currently has adequate resources, fundingand liquidity to meet any existing bonding obligations."

But information provided by the Council noted just howvulnerable the state could be, and how fortunate it has been. HadHurricane Ike, which ended up making landfall in Texas, turned andslammed into Florida, the Council noted, the damages likely wouldhave left the catastrophe fund, and by extension the taxpayers,facing a shortfall of several billion dollars.

"We need to have a cat fund that we can count on," said SamMiller, the Council's executive vice president. "If they'veacknowledged that they can't deliver, then we need to find out atwhat level they can deliver and that needs to be the cat fundlaw."

Those answers, Mr. Miller said, may very likely come from thestate legislature during its session next spring.

The law that expanded the FHCF's liability to $28 billion is setto expire after next year's storm season, and he said thatlawmakers are likely to take up the issue before then.

Additionally, said Mr. Miller, the fund's Advisory Council willrelease another public estimate of its fund and ability to coverprojected losses. While that document will likely not be releaseduntil after the legislative session, Mr. Miller said lawmakers willbe able to glean some idea of the fund's ability to pay and assessthe state of the bond market from which those payments wouldcome.

If the fund cannot say publicly that it would be able to cover atotal loss, he said, "there's going to be a lot of pressure from alot of sources" to examine the fund.