Florida Attorney General’s Statement regarding Cabinet Resolution calling for a National Catastrophe Insurance Program

July 17, 2007 -- TALLHASSEE, FL -- Florida Attorney General Bill McCollum today issued the following statement regarding a Cabinet Resolution, sponsored by the Attorney General’s Office, calling for Congress to support a National Catastrophe Insurance Program:

“Today, the State Board of Administration made an important decision to increase the liquidity of the state’s catastrophic insurance fund in order to have the ability to pay claims immediately after a major storm. Florida’s fund reinsures for catastrophic losses up to $28 billion. From premiums and cash on hand, the fund presently has about $5 billion to pay claims. Today’s action will provide for the borrowing of several billion dollars more to be available immediately and, in the event that the claims’ losses are greater than even this amount, more borrowing would have to be done post-event.

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“Following this action, I proposed a resolution which was passed urging Congress to create a National Catastrophic Insurance Program. Only by the creation of such a program can the risk of catastrophic events like hurricanes and earthquakes be spread outside a single state, and only by the creation of such a national program can we expect to see homeowners’ windstorm insurance premiums in Florida significantly reduced in the future. If the Federal Government becomes the reinsurer of last resort for very large hurricanes and earthquakes, i.e. 100 to 200 year events, more reinsurance will become available at lower premiums and in turn homeowners’ insurance can be offered at lower premiums to Florida’s citizens.

“The Federal Government already extends billions of dollars in taxpayer supported assistance to victims of national disasters. By creating a National Catastrophic Insurance Program, it will assure that more property losses from windstorm or earthquakes or other national disasters are covered by private insurance, thereby reducing taxpayer costs. It is my hope that this resolution will encourage the debate and the passage of legislation now being discussed in Washington for a national catastrophic plan.”

Source: Florida Attorney General