Plan would reduce the FHCF from $17bn to $14bn over three years
A House of Representatives bill to reduce the Florida Hurricane Catastrophe Fund (FHCF) from its current size of $17bn to $14bn over three years has received backing from the House Insurance & Banking Subcommittee.
If the Sunshine state’s reinsurance backstop is reduced in size it would transfer catastrophe risk away from the residual market to the private insurance and reinsurance market.
In recent years, there have been concerns over the cat fund’s post-catastrophe claims paying ability.
The backing of the bill was greeted favourably by representatives from Florida’s business, consumer and conservation groups.
“Today members of the House Insurance & Banking Subcommittee took a necessary first step to reform the overrun Florida Hurricane Catastrophe Fund and better protect the Florida business community and all Floridians from the risk associated with the government-run entity,” said Associated Industries of Florida president and chief executive Thomas Feeney.
He added: “The potential for ‘hurricane tax’ assessments in the wake of the next major storm or series of storms poses a huge financial threat to all Floridians… House Bill 1107 is absolutely necessary in order to spread Florida’s insurance risk outside of the state.”