With the property-catastrophe market drying up following back-to-back years of record hurricane losses in 2004 and 2005, Florida lawmakers took a huge leap into the abyss by passing a law to provide cheaper reinsurance for primary carriers–with the savings to be passed on to policyholders.
There was only one problem–in a worst-case scenario, the move ultimately leaves citizens of Florida (that is, individual residents–not Citizens, the state's property insurer of last resort) with tens of billions in potential exposure.
Before the year's first month was over, Gov. Charlie Crist had signed into law a hastily assembled program the Property Casualty Insurers Association of America had dismissed as a "quick fix" that ignored serious long-term implications.
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