Florida's beleaguered reinsurance program is showing signs of improvement, but the fortunes of the Florida Hurricane Catastrophe Fund (Cat Fund) this year may still depend more on the weather than anything manmade.
The combination of fixes recently enacted by the Florida Legislature and the reluctance by certain large private insurers to buy large chunks of coverage has reduced the overall size of exposure for the Cat Fund for this year's hurricane season.
That decision means that the potential shortfall in the state-created reinsurer has been cut back from what it once was just a few months ago to $7.173 billion. But a major storm would still present major financial problems for the Cat Fund as well as its largest customer, Citizens Property Insurance Corp. New esti- mates show that there is roughly a 5.3 percent chance that the Cat Fund would exhaust its available resources.
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