High on FAIR’s legislative agenda is reforming the Florida Hurricane Catastrophe Fund (Cat Fund). The Cat Fund was created in November 1993 during a special legislative session after Hurricane Andrew. The purpose of the Cat Fund is to protect and advance the state’s interest in maintaining insurance capacity in Florida by providing reimbursements to insurers for a portion of their catastrophic hurricane losses.
The proposed legislation will align the Florida Hurricane Catastrophe Fund’s coverages with the private reinsurance marketplace, repeal the surcharge being paid by insurance consumers, and preserve the Fund’s claims reimbursement capacity by specifying that the Fund should only sell the coverage that the market wants. Correcting these and other inefficiencies will provide direct and indirect rate relief ranging from 8-10% for Florida’s rate payers.
