A Florida trade group called yesterday for halt in what it saidwere efforts to create paranoia and make property owners shift homeinsurers.

The statement came from National Association of Insurance andFinancial Advisors-Florida which said efforts were being made toencourage policyholders to give up highly rated property insurancepolicies based on misinformation.

NAIFA's announcement came on the heels of State Farm'sannouncement that it has requested to begin withdrawing from thestate's home insurance market in what it said would be a two yearprocess. It also follows a statement by a Florida HurricaneCatastrophe official that the fund is $18 billion short of itsrequired $29 billion capacity to backstop insurers.

The shortfall could cause problems for small insurers who relyon the state fund reinsurance in order to secure required financialstrength ratings.

NAIFA referred to published reports that the state's HurricaneCatastrophe Fund "likely will be woefully underfunded and drasticaction is taking place to shore it up or reduce its size." NAIFAsaid "numerous agent advertisements have appeared statewideexploiting the uncertainty."

"It is the height of irresponsibility to use this situation tocreate paranoia and induce people to make decisions that areirreversible and potentially damaging. State Farm has made it clearthat nothing will be done on this matter until after hurricaneseason and most Floridians won't have to make decisions on coveragefor months or even years after that time," said a NAIFA spokesman,Bob Lotane.

While State Farm is leaving the property insurance business, theagent with whom policyholders have developed relationships isstaying, and they will be providing new property insurance optionsfor present policyholders, said NAIFA.

The organization noted that Insurance Commissioner KevinMcCarty's office has been working "feverishly with electedofficials and company representatives to provide Floridians a glidepath into new coverage."

"By maintaining the highly rated coverage policyholders nowpossess, Floridians are not herded into buying policies that couldbe drastically affected by the problems percolating at the CATFund. Down the road when new coverage options need to be applied,hurricane season and the challenges faced by the CAT Fund should bea distant memory," the group said.

NAIFA noted that in coming months much about the insurancemarketplace will depend on action at the federal level, in theFlorida Legislature, and in global financial markets.

Persons are encouraging policyholders who have secure coverage"to make dangerous decisions is fiscally irresponsible. Last yearthe CAT Fund admitted that it likely could not find adequate fundshad a major hurricane(s) hit, and this year it says the situationis even worse," said NAIFA.

The group cautioned Florida residents not to make hasty or angrydecisions that it said may be irreversible and financiallycatastrophic.

State Farm policyholders, NAIFA said, should consult with theirState Farm agent who, "while not party to decisions made by theinsurance company, still has the knowledge and skill to protect thepolicyholders' long-term interests and who will be able to providenew, secure options down the road."