Florida Gov. Rick Scott and members of his cabinet voted lastweek to add $2.2 billion of coverage to the state's catastrophicinsurance fund, according to The Tampa Bay Times. The decision wasmade in anticipation of what is being predicted to be another quiethurricane season for Florida.
|The vote approved a two-part transaction in which the state willbuy $1 billion in reinsurance, transferring that risk to theprivate insurance market, reports The Tampa BayTimes. Another $1.2 billion in coverage will be securedfrom the issuance of bonds. The deal will allow the FloridaCat Fund to reach its state-mandated ceiling of $7 billion to coverall storm claims in a single season.
|According to The Tampa Bay Times, Florida hopesspreading some of its future risk will help the fund avoid havingto hit policyholders with higher assessments if a hurricane impactsthe state. A hurricane has not made landfall in Florida since2005.
|Florida policyholders -- including Citizens Property InsuranceCorp. customers -- will see "minimal" premium increases oftwo-thirds of 1%, or $13.75 per year, according to state financialexperts. Florida Insurance Commissioner Kevin McCarty says he doesnot believe the transaction will result in higher rates,says The Tampa Bay Times.
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