Florida Insurance Commissioner Kevin McCarty tried to lobby Congress today for federal supports for an $18.5 billion shortfall in the state's Hurricane Catastrophe Fund and was hit with criticism from a conservative think tank.

Christian C?mara, Florida office director for the Competitive Enterprise Institute, in a statement from the group said, "Reliance on a Federal bailout as official state policy is reckless at best. Instead of lobbying Washington politicians for money, Commissioner McCarty and Governor Charlie Crist should return to Tallahassee and work together with the legislature to restore a healthy, competitive insurance environment to ensure that Florida is able to weather the aftermath of a storm.

"Taxpayers should not be forced to bailout neither Florida nor the politicians that have placed the state one storm away from economic meltdown."

Edward Domansky, a spokesman for Commissioner McCarty said he had planned to meet with Florida Democratic Representatives Ron Klein and Debbie Wasserman Schultz, but due to President Obama's trip to Ft. Myers, neither was able to personally meet with him.

The commissioner, he said did meet with Rep. Klein's chief of staff and legislative director; and he met with Rep. Wasserman Schultz's chief of staff, legislative director and deputy legislative director as well as Cori Stevens from Gov. Crist's D.C. office.

"Commissioner McCarty is in Washington proposing that Florida be considered for a federal line of credit, for which the state would pay a premium and would recoup any advances through bonding and statutory assessments within Florida.

"The commissioner is not proposing a bailout or asking for a blank check, and any suggestion to the contrary is untrue.

"The line of credit would be triggered only in the extremely unlikely event that a storm exceeding the claims paying ability of the Cat Fund were to hit Florida and the credit markets were still in disruption," he responded by e-mail

Jack Nicholson, chief operating officer for the state fund, said yesterday, the fund under legislation approved last year is required to provide $29 billion in reinsurance to primary insurers, but it may not be able to meet that obligation under today's bond market conditions.

While FHCF has adequate cash on hand to pay current claims and has AA minus ratings from several rating firms its inability to provide the full guaranteed backup for insurers that rely on it could mean that some carriers would lose their ratings and cease to function, according to officials.

Mr. McCarty's lobbying effort was termed a "really, really bad idea" by CEI Senior Fellow Eli Lehrer who directs' the group's Washington-based Insurance Project.

"We've already done far too many bailouts of private companies. State governments - particularly ones that make bad decisions - don't need bailouts as well. Congress should say 'No' to Kevin McCarty," said Mr. Lehrer.

CEI describes itself as a non-profit, non-partisan public policy group dedicated to the principles of free enterprise and limited government.

Special Reports /

Think Tank Scores Fla.'s McCarty For Cat Fund Lobbying Effort

Related Stories

Recommended For You