April 8, 2008

TALLAHASSEE — “AIF applauds our Senate members for taking the first steps on the path to real solutions to our state's property insurance problems.  The decision made today by the Senate Committee on Government Appropriations is an encouraging one, which affects citizens and businesses throughout the state, including small business owners and not-for profits.

“I am pleased that the Senate committee supports the fiscally responsible recommendations being made by CFO Sink to restructure the Cat Fund.  Her proposal to reduce the risk of the Cat Fund by $3-billion is a great first step to reduce the threat to all Floridians should a major storm strike our great state.

“Under the current law the Cat Fund is obligated to issue government revenue bonds in the amount of $25 billion, but in this unstable economic market many analysts believe this will be impossible.  A recent report by the House Committee on Insurance found that if the Cat Fund is unable to meet its financial obligations, many policyholders could experience delays, or may not be paid at all for their hurricane related claims.

“The obvious alternative for insurance companies is to purchase reinsurance in the private market, which has stabilized and is now offering very competitive rates.  Thankfully this option is available and will help reduce the post-event taxes for all policyholders including homeowners, large and small business owners and not-for-profits.

“It is imperative that the Senate continues to back Senate Bill 2156 in order to protect Florida’s taxpaying citizens from facing a financial deficit that will affect our economy and livelihood for years to come.”