The ongoing credit crisis, combined with increasing exposures for state-backed insurers of last resort, could hamper the ability of these plans to cover losses from a major hurricane this year, a rating firm announced.
This year is expected to be an above-average year for hurricane activity, noted the A.M. Best report, titled "Credit Crunch Clouds Outlook of Hurricane Insurers, Cat Funds."
Some states–particularly Florida with its insurer of last resort, Citizens Property Insurance Corp., and its state-run reinsurer, Florida Hurricane Catastrophe Fund (FHCF)–are relying on post-event bond offerings to cover any shortfalls resulting from claims payments after a major storm.
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