Meeting Recap: FHCF Advisory Council

In a meeting earlier this week, the Florida Hurricane Catastrophe Fund (“FHCF”) Advisory Council (“Council”) was advised that the FHCF reorganization proposal by Florida’s Chief Financial Officer (“CFO”) Alex Sink is intended to increase the ability of the FHCF to react to shifts in the private market.  Jack Nicholson, FHCF Senior Officer, reported that the proposal would give more flexibility to the FHCF management to adjust the coverage offered by the FHCF, and streamline the process by which the FHCF would obtain approval for making such adjustments.  Mr. Nicholson also stated that the proposal would cause the FHCF to operate much like the Division of Bond Finance, and cited two “goals” of the proposal:  (1) to incentivize private resinsurers to reenter the market; and (2) to reduce the amount of exposure to the State of Florida. 

We have included a copy of CFO Sink’s proposal for your review.
 
Additionally, Citizens Property Insurance Corporation (“Citizens”) presented the Council with the current state of Citizens’ claims and exposures.  Scott Wallace, President of Citizens, stated that the company purchased nearly 40% of the additional coverage offered by the FHCF following the Special Session on property insurance last January.  John Forney, a Financial Advisor from Raymond James, commented that due to Citizens’ increase in FHCF reinsurance coverage, it would take a 1 – 100 year event for Citizens to have to bond.

 

 

The above information is intended to be a general summary of the FHCF Council meeting.  It is neither intended to provide regulatory advice, legal advice nor specific analysis, and should not be relied upon in making individual business decisions, specific in nature.