A report that Florida's catastrophe funds have over $2 trillionin loss exposure will be clarified in the future, according toofficials from the state's insurance department.

An e-mail from Brittany Benner, deputy director ofcommunications for the Florida Office of Insurance Regulation(OIR), stated that Belinda Miller, deputy commissioner of propertyand casualty for the OIR, has been in touch with the GovernmentAccountability Office about a report issued last month.

Ms. Miller said the GAO will not be making any changes to itsreport, but "clarification will be provided when needed and whenopportunities arise to do so. It is our understanding that theintent of the report was to plan for catastrophes and reviewavailable funding mechanisms."

The report in question was issued last month and reviewed thestatus of state natural catastrophe insurance programs in Alabama,California, Florida, Louisiana, Mississippi, North Carolina, NewJersey, South Carolina and Texas.

According to the report, the Florida Hurricane Catastrophe Fundand Florida Citizens Property Insurance Corp. have more than $2trillion in total exposures, exceeding the exposures of the eightother states examined combined.

The department said, according to quarterly reports frominsurers in the state, that there is about $2.1 trillion inexposure for policies in force that include wind coverage, and $200billion in exposure for policies that exclude wind, for a total of$2.3 trillion.

However, the GAO report does not differentiate between probablemaximum loss and individual loss. With a legal cap on losses, thestate's Citizens Property Insurance Corp. would potentially sufferbillions in losses, not trillions as the report suggests.

The Sun-Sentinel reported that the state's hurricane fund would be responsiblefor $23 billion at the worst, and Citizens for $422 billion.

The major problem with Florida's exposure is that it suffersfrom an overregulated insurance market, said Loretta Worters, vicepresident-communications with the Insurance InformationInstitute.

In an e-mail, she called the state "America's top catastropheproblem" and said its exposure will only grow in the future.

"Florida is not the nation's most uninsurable property insurancemarket, but it is the most dysfunctional," she said. "The source ofthis dysfunctionality, however, is not hurricanes, but ratesuppression and a hostile regulatory environment, which isultimately anti-consumer."

She noted that close to 80 percent of the state's exposure iscoastal and the exposure has grown by $522 billion from 2004 to$2.46 trillion as of 2007, with residential structures accountingfor slightly more than half of the exposure.

"Rate suppression leads to reduced consumer choice, lesscompetition and a weakening among some insurers," she said."Florida Citizens' exposure in recent years has approachedone-half-trillion dollars. Since its creation in 2002, totalexposure to loss in Florida Citizens has increased by 163 percentfrom $154.6 billion to $406 billion in 2009."

A request for comment from the GAO was not immediatelyreturned.