Editorial: Florida Hurricane Catastrophe Fund Needs Immediate Action

The following article was published in the Lakeland Ledger on January 30, 2012:

CAT Fund Needs Immediate Action

By Steve Pociask

Businesses and many consumers statewide have suffered from the risk of insurer insolvency, with roughly a dozen insurers facing liquidation in recent years, despite the absence of hurricanes. Also, Floridians have been burdened with the formerly hidden “hurricane taxes” — policyholder assessments, which have been as high as 8 percent and have been levied on most Floridians, even those who do not benefit from the state’s broken system.

These risks have been hard to communicate, but Floridians are catching on. A survey the American Consumer Institute conducted recently found that 70 percent of Floridians fear being assessed these hurricane taxes, including those that would result if the CAT Fund runs out of money to meet its obligations.

In addition, 80 percent of the consumers surveyed did not want the state to sell more insurance coverage than it could pay in claims, and nearly half of consumers were willing to pay more if it would help avoid insolvencies and taxes.

When it comes to protecting insurance consumers, solvency means everything. In this case, the proposed bills will increase private capital in the market and increase market solvency, thereby protecting homeowners from potential financial losses.

Moreover, these proposals protect consumers from unnecessary cost increases and they put our state on firmer financial footing.

As a consumer, you should know that fixing the CAT fund is necessary and that these proposals deserve immediate legislative attention.

Find this article here:  http://www.theledger.com/article/20120130/COLUMNISTS03/120129257/1042/columnists?p=2&tc=pg