Florida Legislator Calls Proposal “Simply Insane”

February 20, 2014

A Florida state legislator is calling a proposal by the Florida Hurricane Catastrophe Fund to buy $1.5 billion in private reinsurance from Bermudian firms “simply insane,” saying that doing so could raise consumer rates.

According to a report in the Palm Beach Post, “Representative Frank Artiles, a Republican politician based in Miami, Florida, said in a letter to Florida Governor Rick Scott and Cabinet members Monday the state fund is supposed to be a buffer against volatile price swings from offshore private reinsurers, not a customer to increase their business.

“In recent years, when demand was stronger than supply, Bermuda reinsurers had no reservations about jacking up rates on Floridians,” said Artiles, a public adjuster. “Sending them a lifeline now when we are finally seeing some signs of rate relief is simply insane.”

“Jack Nicholson, the Cat Fund’s chief operating officer, said at an industry conference last month the idea probably would raise consumer rates less than 1 percent and could help lower the risk of assessments to state insurance customers if the coverage were needed.

“Artiles said if the Cat Fund had been buying private reinsurance all along it would not have $11 billion in surplus to play claims; the money would go to reinsurers as profits in storm-free seasons and be lost to Florida forever.

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  1. Car Battery says:

    The learned legislator clearly doesn’t understand how insurance works, thinks all insurance is a ripoff, and thinks that Floridians living in a high risk area shouldn’t be paying anymore for coverage than anyone else.