![e21cc95496ecc46cacc5dc83a0609ffd30-hurricane-ian](https://floridapolitics.com/wp-content/uploads/2022/10/e21cc95496ecc46cacc5dc83a0609ffd30-hurricane-ian-1280x853.jpg)
Estimates from the Florida Hurricane Catastrophe Fund, or Cat Fund, approved by its board of directors Wednesday show it could pay out $10 billion to companies due to the damage brought by Hurricane Ian, leaving it with $2.3 billion in cash at the end of the year.
Although it would be able to pay all obligations stemming from this year, it would be a significant hit to the Cat Fund, which acts as a reinsurance fund for property insurers operating in Florida, greatly reducing its ability to pay claims next year without heading to the bond markets and increasing the risk of emergency assessments on policyholders.
“We feel very confident that we can cover our obligations for Ian because coming into this year we had a very large cash balance,” said Gina Wilson, Cat Fund Chief Operating Officer.
The estimates, which are still preliminary projections one month after Ian slammed into Southwest Florida, also assume the $9.25 billion in losses from Hurricanes Irma and Michael don’t increase. The fund would still have other ways of paying claims, however, with $3.5 billion in pre-event bonds and $1.6 billion in new premiums.
But that would still leave the fund with a $9.6 billion gap to meet its $17 billion maximum annual obligation, which would need to be garnered with bonds after a hurricane. If a large enough storm hit that triggered the need for those bonds, they would be backed up by emergency assessments on policyholders. This year, that gap is $1.2 billion, but is unlikely to be triggered, even after Ian.
Wilson warned that if the Legislature — which is poised to enter a Special Session later this year that could address the property insurance market’s struggles — changes the law, that financial outlook could change for the worse.
“When you make changes to the Cat Fund to increase our obligations then this situation would change,” Wilson said. “Anything that increases our obligations or makes us pay out quicker could deplete our resources.”
Earlier this year, lawmakers floated reducing the retention level, or threshold of damages for when the Cat Fund starts paying claims to insurers, to give companies more reinsurance for the coming hurricane season, but the proposal never gained traction.
Global reinsurance giants have pulled back from the Florida market, making it more expensive, if not impossible, for some companies to obtain. That has put pressure on smaller domestic insurers, which have seen losses in recent years, pushing six of them to be liquidated this year before Ian hit.
5 comments
Yrral
October 26, 2022 at 10:02 pm
Tropical low is between Haiti and Cuba this weekend,hope Desantis got his cone pointed in the right way,last thing Florida need is another Hurricane,before election day
eva
October 30, 2022 at 4:16 pm
I am already making an additional $43K suitable or more every month from home by performing genuinely uncomplicated and truthful tasks online. I really brought home $35K (amv-81) in income last month, which isn’t necessarily inheritable. Join up on this hobby right away to start increasing your online earnings by learning how to use the tools provided.
Website—————————————————>>> xy2.eu/vTCK
Impeach Biden
October 26, 2022 at 10:14 pm
There was NO HURRICANE you idiot sheeple.
It was all special effects and crisis actors paid for by George Soros to make DeSantis look bad.
Steve P
October 27, 2022 at 11:04 pm
10B negative after the $20+B has been paid.. It’s not a 10B loss
Yrral
November 1, 2022 at 11:43 am
Will their be a tropical storm on election day, blowing the Democrats to victory on election day,maybe Desantis feeling the cone of uncertainty on Tuesday night
Comments are closed.